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Wages: ETUI shows failure of EU’s wage-cutting austerity policies

Aug 21, 2013 | News

(21 August 2013) – A new infographic comparing wage developments between the year 2000 and 2012 for the EU’s 28 member states provides proof of the impact of austerity and internal devaluation policies on wages in Europe.

Europe is still in the grip of austerity – even though, it became abundantly clear by now that the austerity measures of cutting wages and decentralizing or abolishing coordinated collective bargaining did little to improve the situation of the people living and working in Europe.

On the contrary, according to the European Trade Union Institute (ETUI) (the policies pursued by European policymakers and national governments have aggravated the existing problems and have added to the current economic crisis a deepening social crisis. In the majority of EU countries unemployment is still increasing, wages are still falling, a growing part of the European population faces the risk of poverty and growth has not been restored.

The objective of the wage infographic is to illustrate these developments for the 28 EU member states. The key focus is on wages, because wages are at the very heart of the austerity measures. The main results are:

  • The majority of countries (15 out of 27) record falling real wages. The most dramatic decline of real wages since the onset of the crisis took place in those countries that were subject to financial bailout programmes.
  • An decline in real hourly minimum wages affecting the most vulnerable part of the workforce. Once again, the highest decline can be found in those countries which were dependent on financial aid programmes.
  • A drop in the wage share in the majority of EU countries indicating a redistribution of income from labour to capital.

View the inforgraphic