Wage Developments in a Multi-Level System: A Case of ‘Convergence Without Coordination’?

Our focus in this chapter and the next shifts to the impact of European integration on the outcomes of industrial relations. Singling out wages for special attention needs little justification. The levels of wages, and the wages structures they are embedded in, lie at the heart of the employment relationship and the negotiations that surround its governance. Following Brown and Walsh (1994: 437), being quantifiable, and thus generalizable across all manner of jobs and employees, wages are the common focus and language of policy makers and negotiators alike, albeit their interests may differ. For policy makers, as Chapters 4 and 5 have shown, wages are a key element in the macroeconomic policy mix, with links to employment, social security and taxation; changes in the levels of wages are fundamentally important in maintaining price stability. The wage structure shapes the distribution of employment between skills, employers and regions. For negotiators, the interests of their constituents are paramount. For workers, the level of wages is both the means to livelihood and a measure of self-esteem, explaining the focus on both real wages and relative wage levels or differentials. For employers, the levels of wages (both absolute and relative) are not only a key component of costs, but also instruments of motivation, performance and productivity.