Report

Real Wages still Need to Catch up after Crisis Losses: WSI European Collective Bargaining Report 2023 / 2024

Real wages in the European Union continued their decline in 2023 - despite an acceleration in nominal wage growth and falling inflation rates. For the current year, there are tentative only signs of a slow recovery of the purchasing power of wages. A resumption of real wage growth would stabilize the functional distribution of income and strengthen domestic demand. However, even under this benign scenario, the crisis is not over from workers' point of view: They have borne the brunt of the real income losses associated with the energy price shock resulting from the Russian invasion of Ukraine. The lingering reduction in real wage levels means that wage policy still needs to catch up to contribute to a fairer distribution of the burden between labour and capital.