Transcript Slide 1

Collective bargaining in the chemical sector against
the background of the economic crisis – The EMCEF
CB Report 2009
Seminar ‚Coordination of collective bargaining in the
EMCEF sectors‘
Elewijt, 25-27 September 2009
Béla Galgóczi and Vera Glassner
ETUI
[email protected] & [email protected]
Structure of presentation
●
The macroeconomic background with view to the crisis
● Basic facts and prognoses on the downturn in Europe
● Is the crisis over now?
● The performance of the relevant manufacturing subsectors (output, orders, employment, productivity)
● Snapshot picture in crisis vs longer term trends
● Some employment policy tools
● EMCEF template results 2009
● The controversity of the productivity based wage formula
at the time of the crisis
● What does this mean for collective bargaining in the sector
● Conclusions
2
The nature of the crisis
The financial crisis developed into a full scale global
economic crisis and in a wider sense a `systemic crisis`
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as the financial sector had become disconnected from
economic fundamentals and developed instruments
through financial innovations that started to function in a
virtual reality
The current crisis manifests itself as a severe `demand
shock`
The fundamentals underlying the spread of the crisis,
however, were chronic imbalances in the world economy,
within the Euro area and within the national economies of
many member states.
Europe in full grip of the economic crisis
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The ‘hard landing’ that is visible in the next graph refers mostly to
those economies with unsustainable past growth strategies,
characterised as ‘bubble growth’ in the previous section.
The most dramatic downturn is to be seen in Latvia, where above 10%
GDP growth in 2007 is likely to turn into a decrease of 13 % by 2009.
Previous high-growth economies, such as Estonia, Lithuania and
Ireland, are also expected to be hit hard, with a projected drop in GDP
of 9-11 % in 2009.
Other major economies are expected to experience a downturn of
around 4-5%, with the Euro area GDP set to fall by 4% and the EU27
by 4 % in 2009 (European Commission 2009). The 5.4% likely
downturn in Germany is a huge drag on whole Europe.
Gross domestic product in 2008 and prognosis for 2009
(annual growth)
in %
10
2008
2009
5
-10
-15
Data Source: European Commission (2009).
5
RO
PL
BG
SK
SI
CY
LT
CZ
AT
NL
EL
DE
MT
EU27
BE
ES
EA
FI
HU
FR
UK
SE
PT
IT
LU
EE
IE
DK
-5
LV
0
Facts on the downturn in I.Q. 2009 – an even
bleaker picture
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The downturn in the first quarter of 2009 was 18.6 % in
Latvia, Estonia suffered a 16% drop and Lithuania 11%.
Only Poland has managed limited growth in the I.Q –
showing also that the region is not equally effected
Lithuania already published its II.Q. GDP figure: with a
22.4% drop (year-on-year) this is the largest GDP fall ever
measured in peacetime Europe
Indeed a dramatic picture for the whole of Europe
Employment shows a mixed picture across countries,
dramatic deterioration in Spain and the Baltic states,
relative stability in DE, NL, AT…
Gross domestic product in IV. Q 2008 and in I. Q. 2009
(year on year basis)
in %
IV.quart.08
5
I.quart.09
-15
-20
Data Source: European Commission (2009).
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MT
PL
CY
EL
AT
ES
BE
FR
CZ
BG
PT
UK
DK*
HU
LU*
IT
NL
EU27
-10
SK
SE
RO
DE
FI*
SI*
LT
EE
LV
-5
IE*
0
ES
LV
EE
LT
IE
SK
HU
FR
PT
SE
EU27
EL
BE
PL
FI
DE
IT
UK
MT
BG
LU
RO
CZ
SI
DK
CY
AT
NL
Unemployment rate
in %
20
18
16
14
12
10
8
6
4
2
0
8
May 2008
May 2009
Is the `crisis` over now?
Fragile and sporadic signs of an upturn in the Summer of
2009
● Not only in terms of business sentiment and consumer
confidence indicators (as IFO index for DE, Philadelphia
index for US)
● But in terms of new orders
● and factual data GDP growth in Q2 on previous quarter in
DE (+0.3%), FR (+0.3%), still a -5.9% in DE year/on/year
● DE industrial output Q2 2009 +2% on Q1, BUT still -23%
year/on/year
● Definite signs of an upward turn as a snapshot picture, but
the trend is still downward and it is uncertain bottom has
been reached – SUSTAINABLE?? or just effect of
stimulus packages?
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Relative performance of the manufacturing sector to the whole
economy under the current crisis
Manufacturing had been hit exceptionally hard, not just
because it is cyclical but because of the nature of the
current financial crisis
At the same time employees in manufacturing industry are
better protected and have more tools than elsewhere in
economy (e.g services)
The result: productivity drop much beyond that of the whole
economy
Still the longer term trend of the higher performance of the
manufacturing industry remains
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EU27 Industry new orders (compared to
corresponding period of previous year)
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in %
chemical industry
total industry
5
4
3
2
1
0
-1
-2
-3
11
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
EU27 Industry new orders (compared to
corresponding period of previous year)
average growth 2008
Q1 2009
April 2009
in %
10
0
-10
-20
-30
-40
-50
-60
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Basic metals
Motor
vehicles
TOTAL
Chemicals &
MANUFACT.
chem.
products
paper &
paper
products
Basic
pharmaceut.
products
Output growth
Average 2008
in%
10
5
0
-5
-10
-15
-20
-25
-30
-35
-40
-45
13
Q1 2009
May 2009
basic
pharma
products
paper &
paper
products
chemicals &
chemical
products
rubber &
plastics
TOTAL
MANUFACT.
motor
vehicles
basic metals
Employment growth in selected sectors
average growth 2008
in %
2
March 2009
1
0
-1
-2
-3
-4
-5
-6
-7
-8
-9
14
Motor
vehicles
Rubber &
plastics
TOTAL Basic metals
Basic
Chemicals &
MANUFACT.
pharmaceut.
chem.
products
products
paper &
paper
products
Relative performance of the chemical sector to the whole industry
under the current crisis
In general chemical industry is hit hard but to a somewhat
lesser extent than manufacturing as a whole and
substantially less that metal and automobile sectors
There is also a phase delay in the downturn compared to
metal and automobile (question if chemical sub-sectors
would still reach the depth the metal and automobile
sectors saw in the first quarter
Employment effects seem to be also more moderate sofar,
with the great exception of the pharmaceutical industry:
even output growth, but huge employment loss (!)
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Output and employment: cushioning effect
While manufacturing output fell by 19% in the first Q of 2009,
employment fell by 6%
In chemical industry output down by 20% in Q1, employment by 4.2%,
in paper output down by 15%, employment by 3.9%
This is a positive sign for employment protection, shows the effect of
short working time schemes and labour hoarding practices of
enterprises
At the same time shows a dramatic decrease of productivity (with the
exception of pharmaceuticals (!)
Important however, this is a short term trend (moment picture), longer
term productivity trend still positive
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Longer term trend of productivity (before crisis)
annual change
(%)
LP Total Economy
LP Total Industry
7
LP Total Manufacturing
6
5
4
3
2
1
0
2000
17
2001
2002
2003
2004
2005
2006
2007
Wage formula at the time of the crisis
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To make the picture complete, we show the elements of the
wage formula (wages > inflation+productivity) below
● We should be aware that under these extraordinary times
(especially in manufacturing), this has limited relevance
● After a long period of wage moderation during the boom,
what we see now at the light of the current figures (2009) –
is the opposite:
● Over 3% nominal wage inrease forecast in EA16
(Commission)
● 0.45% expected inflation
● 0.75% fall of productivity for total economy (EA16)
● This shows a substantial overperformance of the wage
formula in 2009...
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Nominal labour costs 2005-2008, 2009 forecast
annual change
(%)
EA16
EU27
4
3,5
3
2,5
2
1,5
1
0,5
0
2005
19
2006
2007
Source: AMECO 2009
2008
2009
Inflation (HCPI), 2005-2008, 2009 forecast
EA16
annual change
(%)
EU27
4
3,5
3
2,5
2
1,5
1
0,5
0
2005
20
2006
Source: AMECO
2007
2008
2009
Productivity growth, total economy
annual change
(%)
2
EA16
EU27
1,5
1
0,5
0
-0,5
2005
2006
-1
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Source: AMECO
2007
2008
2009
What does this mean for collective bargaining
●
We need to stress, thesee are short term trends and
extraodinary times
● Still, this is the first year after a long period, when wages
would grow more than inflation + productivity (with a
substantial real wage increase)
● The productivity slump is the immediate consequence of
the crisis and will remain temporary (hopefully not at the
detriment of employment but through the fast recovery of
output)
● Manufacturing (as shown before) has a larger drop in
productivity then total economy – there the wage formula is
even more `over-performed`
● We also showed the longer term trends (from 1999) and
the higher productivity growth in manufacturing is still true
for this time horizon
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EMCEF Eucob@n – up-dating the CB database
Collective agreements concluded between June 2008 and
June 2009 have been considered in the survey!
New agreements have been reported in the following
countries: Austria, Belgium, the Czech Republic, Finland
and Germany in the period under consideration.
Further considered: Agreements affecting wage formation in
the period June 2008 – June 2009 in the following
countries: Netherlands, Italy, Norway and Sweden;
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Country
AT
BE
CZ
FI
DE
IT
NL
NO
SW
AVERAGE
(over all 9
countries)
EA16
EU27
Coll.
negotiated
wage increase
(2008,
annualized)
inflation a
2008 (AMECO)
productivity a
2008 (AMECO)
2,54
3,2
0,08
2,50
5,00
2,90
3,37
3,63
1,83
3,2
3,40
4,5
6,3
3,9
2,75
3,5
2,2
3,4
3,35
- 0,06
2,45
- 1,53
- 0,01
- 0,52
0,42
- 1,44
- 1,76
2,95
Source: EMCEF CB Template, Survey July 2009
a
annual %-change, AMECO Database July 2009
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Coll.
Negotiated
wage increase
(2009,
annualized)
3,56
0,26
1,88
2,83
2,91
3,2
1,54
2,8
3,4
inflation a 2009
(AMECO*)
productivity a
2009
(AMECO*)
0,54
- 0,3
0,33
1,08
1,3
0,33
0,77
1,4
1,37
1,6
- 0,5
- 0,77
- 1,4
- 1,95
- 0,1
- 2,13
- 1,13
0,44
0,88
- 0,86
-
2,49
3,3
3,66
0,24
-
Qualitative Issues:
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Working time:
8 agreements
● Pensions:
8 agreements
● Training:
5 agreements
● Employability/workability:
4 agreements
● Health and safety:
2 agreements
● Equal opportunities/
gender policy:
2 agreements
● Flexibilisation of labour markets & employment: –
● Other issues:
1 agreement
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Conclusions on the bargaining climate
Even if the sporadic signs of an upturn get manifested in
the rest of the year, the whole year will still show a dramatic
decrease of economic performance (GDP for the EA16 cca
at -4%, in many countries however much deeper)
Manufacturing is hit much more dramatically that the total
economy The wage formula has lost its relevance in the
short-term
All these make the CB climate very unfavourable
Efferts should be concentrated on stabilising employment
and maintaining the purchasing power of workers
This is also a precondition for recovery and the interest of
all players as consumer demand is key in overcoming the
crisis!
Crucial is the CB timetable and the duration of agreements
now!