European wages have not recovered from the crisis

  • economy

Close to a decade after the start of the crisis, wage growth is far from matching pre-crisis rates.

According to a recent study "Benchmarking  Working Europe 2017" carried out by the European trade Union Confederation and the European Trade Union Institute, more than two-thirds of EU member states have seen a slow wage growth or even a decrease in wages since 2008.

The study shows the following situation of wage growth in the 2009-2016 period in EU countries:

  • seven countries have seen wages go down: Hungary, Portugal, Cyprus the United Kingdom, Italy, Croatia and Greece.
  • fourteen countries show slower wage growth in comparison with the pre-2008 crisis period.
       - Romania was particularly affected by this as (wage growth of  0.1% compared to 11.2% in pre-crisis period).
       - Baltic States, Latvia, Lithuania and Estonia have also witnessed a steep decrease in their wage growth rates, going from 10.6%, 8.8% and 8.2% respectively in 2001-2008 to barely more than 1% for all three countries between 2009-2016.
  • only three countries - Germany, Poland and Bulgaria - have seen wages go up since the crisis, with Bulgaria witnessing the highest increase out of the three (6.2% increase of wage growth compared to just 2.5% in the pre-crisis period).

Wage growth rates are not necessarily linked to who has the highest minimum wage. Bulgaria for instance has the lowest hourly minimum wage of 1.42€ but has witnessed the highest growth in wages since the crisis. Poland, also one of the only three countries to have seen wages increase since the crisis, has an hourly minimum wage of 2.64€ which figures amongst the lowest. Luxembourg, France, the Netherlands, Belgium and Ireland have the highest minimum wages, all exceeding 9€ per hour. These figures reveal the extent of income inequality between member states. 

Ensuring fair wages is one of the 20 principles outlined in the European Pillar of Social Rights. EUROCITIES is working with its members and with the EU institutions to make the principles of the Pillar a reality on the ground by translating them into concrete policy initiatives. With income inequalities increasing accros Europe, we believe that the Pillar should be addressing this at all levels, including at local level.   



Photo credit: © EURACTIV