The average collectively agreed nominal increases across the European Union rose from 4.9% in 2005 to 5.6% in 2006. When adjusted for inflation, the average collectively agreed wage increase across all 27 EU Member States was 2.7% in 2006, up from 1.9% in 2005.
There were large differences between countries with regard to real wage increases. In the former EU15 countries, the average increase in 2006 stood at 2.9%, up from 2.8% in 2005, while the rate of real increase rose from 0.6% in 2005 to 0.8% in 2006. More significantly, however, the average increase in the 12 new Member States rose from 7.5% in 2005 to 9.1%.in 2006, and the rate of real increase climbed from 3.5% to 5.2%.
‘While the overall figures for the 27 EU Member States indicate continued moderation in terms of both nominal and real pay increases in Europe, in line with EU monetary policy, the findings in this report regarding the twelve new EU Member States paint a different picture,’ said Jorma Karppinen, Eurofound’s Director. ‘However, these findings are good news for workers in the twelve new EU Member States. The pay gap between workers in the former EU15 and the twelve new EU Member States is closing rapidly.’
According to the findings, the overall picture in all 27 Member States of the European Union shows ongoing moderation in real and nominal pay increases in the former EU15 countries and an upward trend in the twelve new EU Member States. In the new EU Member States, the average nominal pay was 3.1 times higher than in EU15 in 2006 and the real wage increase was 6.5 times higher.
In the new Member States, real pay increases varied from just 1% in Cyprus to 16% in Latvia, indicating a wider variation range than in the former EU15 countries. The real average increase in the new Member States came in it at 5.2% in 2006, up from 3.5 % in the previous year.
For the former EU15 countries, the range of real pay increases in 2006 was between 2.6% in Greece and -0.1% in Germany. The real average increase in the former EU15 countries in 2005 stood at only 0.6%, rising to 0.8% in 2006.
The annual update from Eurofound’s European Industrial Relations Observatory (EIRO) aims to provide a broad, general indication of trends in pay increases over 2005 and 2006 across the EU Member States and Norway. The report also examines collectively agreed pay increases in metalworking, banking and local government, increases in minimum wage levels, increases in average earnings, and the gender pay gap.
