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3.4 Crisis driven changes in wage setting systems in the EU

Abstract:

Data from 2010 shows that slightly more than 50 million employees worked in the public sectors of the EU member states which accounts for a quarter of all persons employed in Europe (EC, 2012). 1 Naturally, the share of the public sector varied greatly among member states, exhibiting more than an 18% difference between the higher Scandinavian data (between 2008 and 2011 in Denmark and Sweden it was 32% on average) and a lower share in South Eastern Europe (during the same time period the public sector employed 18% in Bulgaria and only 14% in Romania)(EC, 2013, p. 94). Though it goes beyond the scope of this sub-chapter we must draw attention to the fact that one of the main obstacles in comparing European public sectors is the lack of adequate statistical information. 2 Data from 2010 is important given that this was exactly the time when the mortgage and credit crises that hit the United States in 2008, and which reached Europe, at least in the sense of the labour market as a production and economic crisis, transformed into a fiscal one. This was mainly the result of three factors: the state founded bail-outs of the troubled bank sector, falling tax revenues and the extra pressure on social and welfare benefits due to the shrinking labour market. As a consequence of this process the retraction of the labour market, felt thus far only in the private sector spilled over to the public sector (Anxo et al., 2013). Our aim in the present sub-chapter is to show the impact of the crisis on the public sector of European Union member states paying special attention to its effects on the wage setting mechanisms. The first part of the sub-chapter maps …