Wage and workforce adjustments in the economic crisis in Germany and the Netherlands

Abstract:

This study uses data from a continuous employee web-survey to investigate the trade-off between wage and workforce adjustments and the role of industrial relations in firm-level responses to the economic crisis in Germany and the Netherlands.

Workforce adjustments seemed to be a continuous organizational strategy, but wage adjustments were less often reported. We found no large-scale evidence of wage concessions being traded-off for job protection in the two countries.

Collective bargaining ensured that wage-setting was more robust than employment protection: employees covered by collective agreements reported workforce adjustments more often than wage adjustments. Low-educated and low-wage employees reported basic wage reductions more often: the economic crisis increased wage inequality. Labour hoarding was reported predominantly by young, male employees with a permanent, full-time contract.