European Unions: Labor's Quest for a Transnational Democracy

5. The Rise of National Competitive Corporatism

c h a p t e r f i v e  The Rise of National Competitive Corporatism S ince the adoption of the Maastricht Treaty in 1993, we can observe a real wage trajectory in Western Europe that fails to fully match the growth of productivity. Does that mean that European trade unions have actively supported wage-moderation policies? It would be wrong to argue that wage moderation, as such, is an indicator of a technocratic renationalization strategy, but if unions did accept low wage increases to support competition state nationalism, then they would have adopted a technocratic renationalization strategy in the field of collective wage bargaining. Unions have adopted wage-moderation policies in the past, for instance during the resurgence of neocorporatism in the 1970s, but these arrangements were social-democratic compromises between conflicting class interests rather than monistic pacts in favor of national competitiveness. Therefore, this chapter reviews not only wage statistics but also labor wage bargaining policies in all Western EU countries except Luxembourg. For the same reason, this chapter relies primarily on statistical data that have actually been used by union experts, even if alternative academic data sets might have provided more accurate pictures of European wage trends. Real Wage and Productivity Developments in the European Union In 1999, Emmanuel Mermet, the European Trade Union Institute (ETUI) economist in charge of ETUC wage-coordination policy, pre- [57] sented data that confirmed that real compensation obtained by employees did not track the increase in labor productivity. Using Commission statistics , Mermet compiled the indexed evolution of real compensation and labor productivity per head from 1980 to 1999 in the fifteen old EU member states. These cumulative index-based figures played an important role in convincing unions that a European coordination of wage bargaining was urgent. Figure 5.1 reveals an increasing disparity between productivity and real compensation growth. After 1993, real wages stagnated while productivity increased considerably. Hence, figure 5.1 seems to confirm the thesis that the European single-market program of 1992 and the coming into force of the Maastricht Treaty in 1993 favored wage moderation due to increased transnational competition. The labor share of the national income, or the adjusted wage ratio as a percentage of GDP to factor costs, is another indicator used by trade union experts to assess wage trends (Schulten 2002a). The wage ratio is linked to the development of real compensation and productivity in the following way. The labor share of the national income increases if real wages increase at a higher rate than productivity, and vice versa. Therefore, an equal development of real compensation and productivity rates has a neutral effect on the distribution of wealth between labor and capital. Table 58 European Unions 1 9 8 0 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 0 1 9 9 2 1 9 9 4 1 9 9 6 1 9 9 8 2 0 0 0 ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ 150 140 130 120 110 100 real compensation productivity ▲ Figure 5.1. Real compensation and productivity in the EU 15 (the fifteen old EU member states). Source: European Commission, European Economy, cited in Mermet (1999). 5.1 indicates that until the 1970s the growth in real wages almost everywhere in Western Europe fully matched the growth in productivity. This not only satisfied the workers who could enjoy an equal share of the general rise in prosperity, but was also instrumental in the mid-century compromise between capital and labor, which was based on the parallel growth of mass production and mass consumption. After 1968, most unions even briefly succeeded in obtaining pay gains above inflation and productivity increases (Schulten 1998, 1999a). By contrast, in the 1980s and the 1990s, there is a significant decrease in the average annual wage share. Only in the United Kingdom did the adjusted wage ratio remain stable during the 1980s and the 1990s, whereas a considerable decrease in the wage ratio can be observed in most of the other countries, especially in Ireland and Spain. This overview indicates a general trend away from productivity-oriented, solidaristic collective wage-bargaining polices (Schulten 2002a). This general picture remains the same, even if we include the reduction of yearly working hours in the calculation (Schulten 1999a). Incidentally, the working -time reductions were also higher during the 1960s and 1970s than during...