Collective wage rises smallest for 20 years

12/07/2005 14:00

Collectively agreed wage levels were 0.6 percent higher in the second quarter of this year than twelve months previously. This can be concluded on the basis of wage agreements already negotiated (37 percent of total agreements). It is the smallest increase since 1984. In 2004 the increase was 1.3 percent.

Collectively agreed wage increases
Collectively agreed wage increases

The wage increase is now also substantially below the level of inflation, which was 1.5 percent in the second quarter of 2005. In the last few years, wage rises had been higher than inflation.

Collectively agreed wages and contractual wage costs
Collectively agreed wages and contractual wage costs

Wage costs also down

The increase in contractual wage costs is also much smaller than in 2004. In the second quarter of  2005 wage costs rose by 1.2 percent. In 2004 they rose by as much as 2.5 percent. In the first two quarters of 2005 the difference between the increase in wage costs and the increase in collectively agreed wages was around 0.6 percent.

This difference was the same as in 2002 and 2003. In 2004 the increase in wage costs was 1.2 percent higher than the wage rise. This relatively large difference was mainly caused by the strong increase in pension premiums in 2004. The fact that the difference dropped again in 2005 is due to the reduction in employer-paid disablement benefit premiums.

Percentage of agreements completed at first publication
Percentage of agreements completed at first publication

Six out of ten agreements not yet completed

Often negotiations on a new collective wage agreement are still underway while the old agreement has expired. The provisional results for the second quarter of 2005 are based on 37 percent of wage agreements that had been concluded.
When the results for April and May 2005 were first published only 22 percent of agreements had been concluded. This is less than usual in past years. Political events resulted in a slow start to new wage negotiations in 2005. Moreover, many agreements did not include wage rises so there was no need to reach fast conclusions. 

Nathalie Peltzer