Collective Agreement Structure

11. ←. However, it is not clear whether Boeri`s (2014)[20] result is driven by the « two-tier » structure of the system or by the lack of wage coordination in two-tiered countries. However, in order to understand the role of collective bargaining in labour market performance, it is important to go beyond coverage by considering its main characteristics and its effective functioning. The collective agreement in Italy is comparable to that of the Netherlands or the Nordic countries. Similarly, Australia and Germany have comparable coverage. However, as Chapter 2 shows, these systems are very different. It is therefore important to consider the characteristics of the system itself. This recalls Aidt and Tzannatos (2008[6]) in their review of trade unions, collective bargaining and macroeconomic performance, which concluded that the operation of the « comprehensive package » was more important than the density or union coverage.

The results show that coordinated collective bargaining systems are linked to increased employment, reduced unemployment, better integration of vulnerable groups and lower wage inequalities than fully decentralized systems. This underlines their role in wage coordination as an instrument to ensure that collective agreements are established taking into account their macroeconomic effects, without compromising the country`s external competitiveness and without taking into account the economic situation. In countries where wage coordination exists, it tends to be strongly supported by employers` organizations, which have contributed to moderate wage growth, and by trade unions, which have ensured a high level of employment. In Sweden, about 90% of employees are subject to collective agreements and 83% in the private sector (2017). [5] [6] Collective agreements generally contain minimum wage provisions. Sweden does not have legislation on minimum wages or legislation extending collective agreements to disorganised employers. Unseated employers can sign replacement agreements directly with unions, but many do not. The Swedish model of self-regulation applies only to jobs and workers covered by collective agreements. [7] ← 12. The classification of countries in these categories of collective bargaining systems inevitably implies some simplification. The in-depth discussion of Chapter 2 should therefore be taken into account when comparing and evaluating the functioning of the different negotiating systems between countries.

Compared to workers who are not covered, the old age premium is lower for those involved in collective bargaining at the enterprise level, and even more so for those who are involved in sectoral collective bargaining. Collective bargaining thus reduces wage inequality, in part by flattening the distribution of wages among people of different ages.