The real wages of European workers have experienced a decline over the last few years. In real terms, the results show a decline of the labor compensation per hour – 16,5 per cent in 1996-1999, 28 per cent in 2000-2003, and 33 per cent in 2003-2006. Moreover, the workforce considered their wages growing less than their labor productivity per hour. The data for these periods shows a bad performance of the real wages per hour in Europe in manufacturing and services.
In 2001 approximately 24 per cent of the US labor force earned less than $9 per hour. In spite of the fact the majority of the workers with high school education are low-wage workers, some of them are relatively high-paid.
There are a great number of studies on wage rates and their distribution among workers with certain social and/or demographic characteristics.
This essay proposes a theoretical framework and provides an analysis which predominantly complies with the existing literature. The author investigates the reasons behind the wage rates in the manufacturing sector in order to provide a forecast for the next decade.
Tags: Wage determination, Wage determination rates, Davis Bacon wage determinations
[...] The globalization will lead to greater mobility and more choices for workers, which means that employers will have to provide higher wage rates in order to keep them Shift from manufacturing to services. This will lead to reduced bargaining power for workers in manufacturing, since they will try to keep their jobs. However, this factor will be significant only for the highly industrialized countries Customs and norms. In a globalized world, there are not common customs and norms that everybody should stick rigidly to. [...]
[...] The question is, how does the process of globalization affect the bargaining power of workers in the manufacturing sector? For the purposes of the essay SID (Sectoral Innovation Database) produced at the University of Urbino will be used. SID mixes data from several surveys regarding the economic performance of the EU countries. The unit of analysis comprises 21 industries belonging to manufacturing sector in the countries that comprise approx per cent of the European economy, namely France, Germany, Italy, Spain, Portugal, the Netherlands, United Kingdom, Poland and Norway in the period between 1994 and 2006 (Table No.1). [...]
[...] This influences the wages of workers in sectors with cyclical output such as manufacturing. As it was noted above, Europe has observed wage dynamics over the last few decades due to the low mobility of employees in many manufacturing industries. According to the EIRO (Eurofond's European Industrial Relations Observatory), the average wage rates increase for the workers in Europe dropped from 2.7 per cent in 2006 to 2.3 per cent in 2007. According to the paper, “collective bargaining plays a relatively significant role in pay setting across Europe”. [...]
[...] Table No Manufacturing industries included in the SID Industries NACE Food, drinks and tobacco 15-16 Textiles 17 Clothing 18 Leather and footwear 19 Wood and products of wood and cork 20 Pulp, paper and paper products 21 Printing and publishing 22 Mineral oil refining, coke and nuclear fuel 23 Chemicals 24 Rubber and plastics 25 Non-metallic mineral products 26 Basic metals 27 Mechanical engineering 28 Office machinery 29 Manufacture of electrical machinery equipment 31 Manufacture of radio, TV and communication equipment 32 Manufacture of medical, precision and optical 33 instruments, watches and clocks Motor vehicles 34 Manufacture of other transport equipment 35 Furniture, miscellaneous manufacturing; recycling 36-37 Source: Bogliacino During the analyzed period (1994-2006) a major change occurred into the European economy. [...]
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