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This document summarizes a presentation on wage dynamics and sectoral structures in Europe. It makes three key points: 1. While productivity has increased similarly in manufacturing and services in France and Germany, wages have diverged, rising less in services. 2. There are correlations between more productivity being transferred to wages in services, less inequality, and more inflation. Less inequality also correlates with more inflation. 3. There has been no convergence in productive efficiency between European countries. This presents a "triangle of incompatibility" around wages, inequality, and inflation that different strategies aim to resolve.
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The ＾neo-liberal way out￣ of the triangle
? A reform of the markets in the non-tradables sector, through its
modernization combining increased competition and wage
moderation, would exert a downward pressure on the internal
exchange rate of France and would contribute to reducing its
current account deficit.*
?The recovery in the relative price of manufactured goods will make it
attractive again to invest in manufacturing. It will raise the industrial
capacity of production and trigger the re-industrialization. [It could
come] from increased competition in services, which would lower
the price of services.**
* Mouhamadou Sy, ? R└duire le d└ficit des └changes ext└rieurs de la France. Le r?le du taux de
change interne ?, France Strat└gie, septembre 2014.
** ? La France et l¨Italie se redresseront quand le prix relatif des produits manufactur└s
remontera dans ces deux pays ?, Patrick Artus, Flash Natixis n＜686, 11 septembre 2014.](https://image.slidesharecdn.com/brux914-140926055057-phpapp02/85/Brux914-17-320.jpg)
Brux914
- 1. ETUI-ETUC conference ? Europe at a crossroads ? 25 September 2014 C Panel 11 ? Wage as an engine for growth ? 1 Wage dynamics and sectoral structures in Europe Odile Chagny and Michel Husson (Ires)
- 2. 1 Starting point A France-German comparison 2
- 3. ?1. Similar developments in productivity 160 150 140 130 120 110 100 196 198 France manuf. 20 202 Germany manuf. 204 206 France services Germany services 208 2010 2012 manuf=tradables services=non-tradables 3
- 4. ?1. Similar 2. Diverging developments developments in productivity of wages 120 115 110 105 100 95 France manuf. France services Germany manuf. Germany services 1996 1998 2000 2002 2004 2006 2008 2010 2012 manuf=tradables services=non-tradables 4
- 6. Wage sectoral structure : two polar situations 6
- 7. 2 Some stylized correlations 7
- 8. 8 1. More productivity transfers to wages in services ? less inequality
- 9. 9 2. More productivity transfers to wages in services ? more inflation
- 10. 10 3. Less inequality ? more inflation
- 11. 11 4. Less productive efficiency ? more inflation
- 12. 3 No convergence in productive efficiency 12
- 13. 13 No convergence in productive efficiency
- 14. 14 No convergence of productive efficiency
- 15. 15 A first ＾triangle of incompatibility￣
- 16. 16 Looking for an optimal ＾wage rule￣ A second ＾triangle of incompatibility￣?
- 17. 17 The ＾neo-liberal way out￣ of the triangle ? A reform of the markets in the non-tradables sector, through its modernization combining increased competition and wage moderation, would exert a downward pressure on the internal exchange rate of France and would contribute to reducing its current account deficit.* ?The recovery in the relative price of manufactured goods will make it attractive again to invest in manufacturing. It will raise the industrial capacity of production and trigger the re-industrialization. [It could come] from increased competition in services, which would lower the price of services.** * Mouhamadou Sy, ? R└duire le d└ficit des └changes ext└rieurs de la France. Le r?le du taux de change interne ?, France Strat└gie, septembre 2014. ** ? La France et l¨Italie se redresseront quand le prix relatif des produits manufactur└s remontera dans ces deux pays ?, Patrick Artus, Flash Natixis n＜686, 11 septembre 2014.
- 18. 18 ? Since 2009 wages have fallen more (or risen less) in non-tradables than in tradables. ? More ＾wage moderation￣ leads to a wider gap. ?The correlation is particularly pronounced for CEE countries.
- 19. 19 A more progressive way out of the triangle 1. A wage rule: an overall rise of wages according to the general price index and the average productivity ? fair distribution of productivity gains 2. A European system of minimum wage ? reduction of discrepancies between sectors 3. A ＾price rule￣ to obtain an equalization of profit rates between sectors: the relative sectoral prices should vary inversely with the relative sectoral productivities ? constant profit share in all sectors 4. Transfers and investments (structural funds) in the productive sector to ensure a faster productivity growth in the catching-up countries ? convergence of inflation rates between countries
- 20. 20 Thank you for your attention
Editor's Notes
- #4: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #5: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #6: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #7: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #9: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #10: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #11: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #12: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #14: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #15: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #16: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #17: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #18: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #19: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #20: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne
- #21: - Ici on parlera Juste prix et salaire on ne parle pas du lien fiscalit└ ou cotisations sociales et salaire - Cf tableau recommandations de la commission europ└enne