Comparison of the European job markets
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This report aims to synthesize, analyze and interpret a data table in a comparison of European labor markets, especially in pay negotiations. This database includes 15 individual countries, including 15 European countries and 8 variables related to wage negotiations. It is derived from the book 'Economics and Statistics' .
The analysis of the point cloud can demonstrate that the UK is fully offset with respect to all other points, which is also true on the initial data table. Indeed, the United Kingdom is the only country for which the three variables considered 8, are zero, i.e. the centralization and coordination of bargaining, the cooperation between social partners and the importance of works councils. In addition, as explained above, this country has peculiarities in terms of contributions and squared cosines. One can therefore conclude that this is an unusual point. Therefore, it seems interesting to analyze the economic policy of this country in terms of the labor market.
The United Kingdom is characterized by strong decentralization of bargaining, low cooperation between social partners and the coverage of collective low importance and a low of works. It is thus clearly distinguishable from other European countries analyzed. Strong decentralization of bargaining means that unions and employers' organizations do not coordinate in their negotiations. The coverage of collective agreements is the share of employees covered by collective agreements. In the UK, only 33% of employees are covered by a collective agreement, which is low when compared to the case of Sweden (91%).
Collective bargaining has a dual function: it allows one to determine wages and working conditions that prevail for a given group of workers covered by an agreement signed within the framework of free and voluntary negotiations between the two parties, it provides employers and workers the opportunity to define, by agreement, the rules governing their relationship. In the UK, the key decisions on wages are played at the decentralized level. Thus, there is no national consensus between representatives of employers, trade unions and the state, on the salary issue. Moreover, unions are defined by the ILO as an organization "comprised mostly of employees, whose main activities include the negotiation of wage rates and employment conditions."
British trade unions have a limited role at national level. Only a minority of employees have their wages set by collective agreements. In addition, the decentralization process of negotiations has led to major changes in the late 1980s with the collapse of the national collective bargaining in the banking sector in 1987 or in the retail sector in 1988. Even when national agreements exist, they hardly play any role. In addition, employers and unions have little to say about wage growth at the national level. Indeed, for the government, they must be compatible with economic data, including changes in interest rates imposed by the Bank of England.
The government's position is that wages are better regulated at the local level by the players 'direct', knowing that the Bank of England oversees all of its monetary policy. Thus, it is difficult to envisage any discussion or compromise at the national level. Finally, the minimum wage was introduced in April 1999, but has no impact on the evolution of wages. In conclusion, the United Kingdom is characterized by a liberal policy.
Tags: Comparison of job markets; European countries; role of trade unions in United Kingdom; pay negotiations