THE DETERMINANTS OF WAGE BARGAINING

Comparative studies agree that wage policy in Austria is characterized by a high degree of macroeconomic (i.e. cross-sectoral) coordination. At the same time, collective wage agreements are formally fixed at the sectoral level. As an implication, Austria appears to represent the case of a decentralized but coordinated approach to wage policy. From a comparative perspective, this is a rather unusual arrangement, since decentralization and coordination of wage setting do not easily fit together. Given notable economic differences across sectors, one might expect centralized bargaining (resulting in one single central-level wage agreement) to be the only mode of wage policy capable of delivering coordinated wage setting. In contrast to this, coordination in Austria is said to rely on the leading role of collective bargaining for the metal industry which sets the pattern for the other sectoral bargaining units. This project addresses three questions pertaining to this form of pattern bargaining: (1 ) The project examines how much the metal industry actually leads the process of wage formation in Austria. This refers to the effectiveness of pattern bargaining as a means of wage coordination. (2) The project analyzes the reasons why the distinct bargaining units of Austria have embarked on pattern bargaining. (3) Adopting a cross-nationally comparative research design, the project also tests the socio-economic performance of pattern bargaining, as compared to alternative institutions of wage policy. Economic integration of Europe makes these questions especially relevant. This holds true for both the domestic (i.e. the Austrian) and the comparative perspective. As regards Austria, the project findings can inform about the future of pattern bargaining, in particular its capacity for coping with ever growing differences across sectors that are caused by European integration as well as by more general processes of economic internationalization. From a comparative perspective, the project is relevant since pan-European coordination of wages is argued to be one of the two preferable strategies which might align wage formation in Europe with the requirements of European Monetary Union. Since a centralized approach to pan-European coordination is not feasible due to the persistent diversity of the national wage-setting institutions in Europe, only the decentralized road to coordination remains as an option. Insight into the Austrian case of pattern bargaining can help clarify the prospects and preconditions for decentralized cross-border coordination of wages in the euro zone.

The internationalization of markets and the completion of the European Monetary Union (EMU) gave new impetus for the systematic examination of the institutional differences between the collective bargaining systems of the EU- member states. Since under the conditions of the EMU the member states are deprived of monetary and budgetary instruments to adjust to asymmetric shocks that are resulting from imbalances in economic development in the member countries. Therefore, the efficiency of instruments for the coordination of wage bargaining is of utmost importance. Comparative studies agree that wage policy in Austria is characterized by a high degree of macroeconomic (i.e. cross-sectoral) coordination, although collective wage agreements are formally fixed at the sectoral level. As an implication, Austria appears to represent the case of a decentralized but coordinated approach to wage policy since wage bargainers are said to rely on the leading role of collective bargaining in the metal industry which sets the pattern for the other sectoral bargaining units. This project addresses three questions pertaining to this form of pattern bargaining: (1 ) The project examines how much the metal industry actually leads the process of wage formation in Austria. This refers to the effectiveness of pattern bargaining as a means of wage coordination. (2) The project analyzes the orientation criteria and motives of wage bargainers in Austria have embarked on pattern bargaining. (3) Adopting a cross-nationally comparative research design, the project also tests the socio-economic performance of pattern bargaining, as compared to alternative institutions of wage policy. To summarize, the analysis revealed that informal and formal coordination activities such as the regular exchange of information within as well as between economic sectors are taking place whereby the communication links between the employers` and the employees` side are in part strongly institutionalized. The most important coordination effect arises from the autumn bargaining round that was established in the early 1980ies, and where wages and working conditions for both blue- and white collar employees of the metal sector are negotiated collectively. It can be empirically proved that the bargaining outcome of the metal sector has a far-reaching signaling effect for the majority of other sectors since the beginning of the 1980ies. Strikingly, the cross-sectoral coordination effect is the result of implicit processes of coordination. Hence, for the entire period there is no "official" cross-sectoral coordination by the two peak organizations ÖGB (Österreichischer Gewerkschaftsbund) and WKÖ (Wirtschaftskammer Österreich). From an international perspective, the empirical results of the study are backing the feasibility and the positive effects of a transnational, de-centralized coordination of wage bargaining in the form of pattern-bargaining against the background of the EMU.