Category: Uncategorized

ERU Seminar: The Collective Bargaining Wage Premium in Ireland and 14 other EU countries

Date: Wednesday November 23rd 2011
Topic: The Collective Bargaining Wage Premium in Ireland and 14 other EU countries
Speaker: Dr Rory O’Farrell, ERU
Venue: INTO Training Centre, 38 Parnell Square, Dublin 1
Time: 4-5:15pm (Tea and coffee from 3:50pm)
Abstract:

This paper measures the collective bargaining pay premium for Ireland and 14 other European countries using data from the 2006 European Structure of Earnings Survey (SES). The European SES is a survey of matched worker-firm data that is gathered in a comparable fashion across the EU and gives an opportunity to measure the collective bargaining pay premium in a consistent cross-country manner.
The paper shows that a significant firm level collective bargaining pay premium is found across Europe, but its size varies widely with regard to country and form of collective bargaining. There is also evidence that firm level bargaining leads to a more compressed wage structure.

JEL: J31, J51, J52
Keywords: Trade unions, Collective Bargaining

It is widely reported that the German parliament is debating the news that Ireland is planning to raise the top VAT rate by 2%.   Of course, all else equal, an increase in any tax rate has a negative impact.  However, it is important to appreciate that an increase in VAT that avoids an increase in labour taxes is, in relative terms, an employment-friendly policy and is also part of the mix that can engineer a “fiscal devaluation” that can partially replicate the impact of a “currency devaluation” .

A VAT increase is especially effective if it is understood to be permanent (no point in delaying consumption until the tax increase is reversed).  Even better, a widening of the VAT base can further assist in raising revenue, alleviating pressure on other parts of the tax base.

In terms of income distribution, the regressive impact of a VAT increase has to be calculated in the context of the overall package of taxes and transfers, since it is important to work out the net impact of all policy changes taken together, rather than on a “one at a time” basis.

…is here. Minister Howlin’s speaking notes are here.

Comments later, here’s a wordle of the document.

The WSJ has an article on the scramble for assets that are acceptable as collateral at the ECB.  (The Irish banks have circumvented much of this by relying on an array of government-guaranteed securities.)

Marek Belka is the Governor of the Bank of Poland and influential in the EU-wide debate – his FT op-ed is here.

Previously, he was head of the IMF’s European Department – his successor Antonio Burges is to be replaced by Reza Moghadam, as announced here.