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Wage formation in Belgium

Collectively agreed wages in Belgium Guy Van Gyes, Sem Vandekerckhove HIVA-KU Leuven CAWIE KICK OFF MEETING 23-24 January 2012, Leuven . Wage formation in Belgium. Cumulative system National > sector > company > (employee) Always in joint committees Trade unions: ABVV, ACLVB, ACV

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Wage formation in Belgium

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  1. Collectively agreed wages in BelgiumGuy Van Gyes, Sem VandekerckhoveHIVA-KU LeuvenCAWIE KICK OFF MEETING23-24 January 2012, Leuven

  2. Wage formation in Belgium • Cumulative system • National > sector > company > (employee) • Always in joint committees • Trade unions: ABVV, ACLVB, ACV • Employers: VBO, Farmers’ association, small entrepreneurs, social profit • Juridic significance • Covering almost all employees (extension)

  3. National level • National council of labour (NAR) • Minimum wage • Collective labour agreements (CAO) • Welfare fixed • Ad hoc raises (last: October 2008) • Broad lines of employment conditions • Eco-cheques: net benefits to spend on ‘green’ products and services • Non recurring performance pay • Central council for the economy (CRB) • Wage norm • Inter-sectoral agreement (IPA) • Upper limit for wage raises • Two year period • Usually in percentage, exception: 2009-2010 (250 EUR) • Training, etc.

  4. Sector level • Joint labour committees and subcommittees • Following an IPA • Collective labour agreements (CAO) • Index mechanism • Year to year (monthly to every two years) • 2% indexation • Margin for company agreements: • Normal agreements: indexation + real wage increase • All in agreements: real wage increase depends on indexation • Enveloppe systems: composition of earnings to be decided at the company level (e.g. net benefits/cheques versus gross raises)

  5. Company level and below • Company agreements • Agreement is generally not registrered • Supplementary to sector agreements • Implementing sector agreements • Replacing sector agreements: de facto when a company classification system is used • Employee agreements • Rare for most employees • Generally a bonus, extra days off, working times, … • Employees with individual bargaining power: fringe benefits (car, shares, …)

  6. Measuring collectively agreed wages • Holding institution: ministry of labour (FOD WASO) • Index of conventional wages (ICL) • Since 1958 • Published monthly based on CAO’s • Statistic • By employee class (blue/white collar), for the whole economy and by sector • Sector figures are derived from joint committees • Components • Indexation • Wage change relative to the average of wage scales in the base year • Change in working time (blue collar only) • Company agreements are excluded

  7. Centralization

  8. Components of conventional wages

  9. Quirks • Note Esteban Martinez • Company level remains a black box •  Select company agreements > 3000 white/blue collar workers • Composition effects unknown • Changing jobs distribution • Changing age distribution (seniority effect) •  Profile shifts could be followed per sector • Moving of wage components from salary to extras • To avoid surpassing the wage norm •  Linear bonuses could be included • Sum of white and blue collar collective wages skewed by working time •  Measuring white collar working time • Best option: collecting individual conventional wage information

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