Bargaining About Wages: Evidence from Spain

Abstract

Throughout all the chapters we have considered some union variables (particularly the proportion of workers representatives belonging to a given union) to capture any difference in bargaining power amongst unions.Concerning wage increases, we have not found any systematic difference amongst them in chapter 4 and we have found that regional unions obtain lower increases in chapter 5. Concerning wage levels (chapter 3) we have found that the variable representing the UGT union is associated with lower wage and higher employment levels. Jointly, they seem to suggest that the CCOO union adds more pressure to the bargaining process than other unionsThe effect of the strike variables on wage outcomes have been considered throughout chapters 3 (on wage levels) and 5 (on wage increases).In both chapters the set of strike variables have been found relevant (being the services wage equation an exception). However, whilst for services theestimated effect is of the same sign, for the manufacturing evidence is contradictory. In particular, for the latter sector, wage increase analysis suggests a negative relationship among wage increases and strike length. Onthe contrary, wage levels analysis suggests a positive relationship. Our suggestion for further work is to consider more carefully the specification of the set of strike variables, specially strike costs.As major conclusions on the wage setting process in Spain we would like to stress the implicit sequential bargaining structure and the extreme importance of aggregate setting. The first step of the implicit sequence is the wage increase setting, closely linked to aggregate setting (industry orupper) and to the achievement of the indexation clause. The second step, in which there is the bargaining over wage complements and the compensation for the expected productivity increase, is more closely related to the performance of the firm.Finally, we would like to remark that aggregate factors have a much greater influence in wage setting than the specific conditions of the firm.This structure can have several consequences. For instance, in an economy with null or small labour force mobility (as in Spain) the pressure of unit labour cost will squeeze out of the market, sooner or later, a significant number of firms.