Europeanization of Labor Relation

Against the background of macroeconomic imbalances in the Eurozone and the new framework of European Economic Governance the field of wage determination has become more prevalent. With currency devaluations as a tool to improve international cost competitiveness not being available any more in the Economic and Monetary Union (EMU), national collective bargaining systems became an important parameter to adjust to macroeconomic imbalances. Thus, the need to coordinate wage policies across borders increased while the preconditions for an effective coordination have worsened due to recent interventions into wage setting institutions of countries with large public deficits and high levels of public debt by national governments and the Troika. In this project we aim at analysing the opportunities and limits of a transnational coordination of wage polices. Thereby, our focus is on the relationship between European trade unions and their member organisations as diverging national and sectoral interest positions and perceptions of costs and benefits of a transnational coordination are assumed to be further exacerbated at the European level. We aim at investigating those social mechanisms that contribute to or hinder the coordination of labour policies at transnational level. Employers associations and (trans)national governmental actors will be considered in the analysis as (potential) actors in the field of wage bargaining coordination as well as addressees of trade unions.

The research project The Europeanization of Labour Relations as a subproject of the research group Horizontal Europeanization investigates the question if and how practices of national collective bargaining have changed due to the increasing interrelatedness and internationalization of the European economy. The shaping of the EU as a unified economic, legal and political space that is organized across national borders has been advanced during the last three decades by events such as the completion of the single market, the monetary union and eastern enlargements. Although the process of European integration has been severely challenged recently, market internationalization further accelerated. Many European companies operate on international markets and have production sites in different countries. Big corporations often have work councils on the basis of European directives in which workers representatives from different countries coordinate their activities. However, collective bargaining between employers organisations and trade unions is still conducted at national level. In this project, the question how the relationships between bargaining partners have changed due to the internationalization of the economy as well as to European regulation and common financial and fiscal policies was addressed by investigating two sectors in three EU member countries: social services and the metal industry in Austria, Germany and Italy. For the empirical analysis, a series of interviews with experts from national employers organizations and trade unions from the three countries under investigation was conducted. The most important outcome of the inquiry is that many of the statements suggest a process of Europeanization of labour relations. Although trade unions and employers organisations conduct their negotiations at national level, they are aware of the fact that they act within a European field of labour relations that impacts their agency. The respective national practices of collective bargaining enjoy a different degree of legitimacy among EU institutions such as the European Commission and the European Central Bank. While the German and the Austrian collective wage bargaining system, that ensures international competitiveness by coordinated wage-setting, is highly valued by European actors, the Italian wage-setting system is subject to strong pressures for decentralization. Although there is a process of convergence between the investigated bargaining systems, as they are equally exposed to international pressures towards liberalization and decentralization. Due to the higher competitiveness of the economy and supportive institutional conditions however, the Austrian and the German system are better capable of maintaining well-established practices of collective bargaining than the Italian system. The latter has been criticized for years by European institutions with respect to its functionality, which has contributed to its weakness. Nevertheless, social partners in Italy have undertaken huge efforts and eventually succeeded in a renewal of their practices of collective bargaining.