Abstracts
Summary
Labour shortages have become increasingly widespread across Europe and other advanced economies since the post-2008 recovery, due to rising demand and structural labour market transitions—digital, green and demographic. They further worsened during the COVID-19 pandemic, through shifts in worker preferences, and again during the post-pandemic economic rebound. While policymakers and academics often attribute the shortages to skill gaps, which may be reduced via training or increased migration, there is growing recognition that unattractive wages and poor working conditions are also hindering recruitment.
We argue that labour shortages, while economically disruptive, can improve the bargaining position of workers, particularly those with historically limited power. Drawing on both aggregate and individual-level evidence, we examine the interrelationships that encompass labour shortages, individual or collective bargaining positions and wages. We find that industries facing more acute shortages tend to see stronger wage growth, especially among new hires. Wages increase especially among women, migrants and younger workers—groups with less institutional support or weaker collective representation. We thus show how labour shortages can act as a corrective force by partially offsetting decades-long declines in workers’ bargaining power. These quantitative findings are supported by a qualitative survey of union representatives in the EU construction and woodworking industry, which is greatly affected by shortages. The survey responses reveal a complex relationship between shortages and working conditions: 1) shortages lead not only to some wage growth but also to intensification of work; and 2) most strategies do not include the unions and are, for instance, more focused on domestic or international recruitment. Our research supports the view that labour shortages provide workers with opportunities, but there may also be dangers: in the short run, individual bargaining may greatly increase wages while weakening collective bargaining, thus limiting the ability of all workers to achieve lasting gains.
Keywords:
- vacancies,
- tight labour market,
- collective bargaining,
- wages,
- job quality,
- Europe,
- power resources,
- shortages
Résumé
Les pénuries de main-d’oeuvre se sont multipliées en Europe et dans d’autres économies avancées depuis la reprise post-2008, portées par la hausse de la demande et des transitions structurelles — numériques, écologiques et démographiques. La pandémie de Covid-19 a amplifié ce phénomène en modifiant les préférences des travailleurs et avec le rebond économique qui a suivi. Si le débat politique et académique impute souvent ces pénuries à des déficits de compétences — pouvant être comblés par la formation ou la migration — on reconnaît de plus en plus que des salaires peu attractifs et de mauvaises conditions de travail en sont aussi des causes majeures.
Cet article avance que, malgré leurs effets perturbateurs, les pénuries peuvent renforcer la position de négociation des travailleurs, notamment ceux historiquement moins puissants. Sur la base de données agrégées et individuelles, il examine les liens entre pénuries, pouvoir de négociation (individuel ou collectif) et salaires. Les secteurs les plus touchés connaissent généralement une hausse salariale plus marquée, surtout pour les nouvelles recrues, et particulièrement parmi les femmes, les migrants et les jeunes — groupes moins bien représentés syndicalement. Les pénuries peuvent ainsi partiellement compenser le recul du pouvoir de négociation observé depuis des décennies.
Une enquête qualitative auprès de représentants syndicaux dans le secteur européen de la construction et du bois, fortement touché, illustre cette dynamique : hausse des salaires mais intensification du travail, stratégies patronales centrées sur le recrutement national ou international plutôt que sur la négociation collective.
Ces résultats suggèrent que les pénuries peuvent offrir des opportunités pour améliorer les salaires et conditions, mais aussi des risques : à court terme, des hausses obtenues individuellement peuvent affaiblir les négociations collectives, limitant ainsi les gains durables pour l’ensemble des travailleurs.
Appendices
References
- Aeppli, C., & Wilmers, N. (2022). Rapid wage growth at the bottom has offset rising US inequality. Proceedings of the National Academy of Sciences, 119(42), e2204305119. https://doi.org/10.1073/pnas.2204305119
- Araki, S., Bassanini, A., Green, A., & Marcolin, L. (2022). Monopsony and concentration in the labour market. In OECD (ed.), OECD Employment Outlook 2022. OECD Publishing. https://doi.org/10.1787/0ecab874-en
- Bassanini, A., Bovini, G., Caroli, E., Ferrando, J. C., Cingano, F., Falco, P., Felgueroso, F., Jansen, M., Martins, P. S., Melo, A., Oberfichtner, M., & Popp, M. (2024). Labor market concentration, wages and job security in Europe. Journal of Human Resources. https://doi.org/10.3368/jhr.0223-12757R1
- Brandolini A., Rosolia A. & Torrini A. (2010) The distribution of employees’ labour earnings in the European Union: data, concepts and first results. In Atkinson A.B. & Marlier E. (eds.) Income and living conditions in Europe, Publications Office of the European Union, 265-287.
- Card, D., Cardoso, A. R., Heining, J., & Kline, P. (2017). Firms and labor market inequality: evidence and some theory. Journal of Labor Economics, 36(S1), S13–S70. https://doi.org/10.1086/694153
- Cardoso, A. R., Guimarães, P., & Portugal, P. (2016). What drives the gender wage gap? A look at the role of firm and job-title heterogeneity. Oxford Economic Papers, 68(2), 506–524. https://doi.org/10.1093/oep/gpv069
- Causa, O., Abendschein, M., Luu, N., Soldani, E., & Soriolo, C. (2022). The post-COVID-19 rise in labour shortages. OECD Economics Department Working Papers, 1721.
- Cedefop. (2024). Untangling labour shortages in Europe: Unmet skill demand or bad jobs? (Cedefop Working Paper Series No. 20). Publications Office of the European Union.
- Denk, O., Garnero, A., Hijzen, A., & Martin, S. (2019). The role of collective bargaining systems for labour market performance. In: Negotiating our way up: Collective bargaining in a changing world of work (pp. 105–163). OECD Publishing.
- Eurofound. (2021). Tackling labour shortages in EU Member States. Publications Office of the European Union.
- Eurofound (2024). Company practices to tackle labour shortages. Eurofound. Publications Office of the European Union.
- European Commission. (2022). European business cycle indicators: a closer look at labour shortages across the EU (Technical Paper No. 59). Publications Office of the European Union.
- European Commission. (2023). Annual report on intra-EU labour mobility 2022. Publications Office of the European Union.
- Garnero, A. (2021). The impact of collective bargaining on employment and wage inequality: evidence from a new taxonomy of bargaining systems. European Journal of Industrial Relations, 27(2), 185–202. https://doi.org/10.1177/0959680120920771
- Groiss, M., & Sondermann, D. (2023). Help wanted: the drivers and implications of labour shortages (ECB Working Paper No. 2023/2863). ECB.
- Gunderson, M. (2023). What do labour economics and industrial relations have to say to each other? Relations industrielles / Industrial Relations, 78(4). https://doi.org/10.7202/1111500ar
- Jalette, P. (2024). Labour shortages: a game changer for industrial relations? Labour and Industry, 34(1), 11–25. https://doi.org/10.1080/10301763.2023.2230953
- Kauhanen, A. (2024). The effects of the decentralization of collective bargaining on wages and wage dispersion: evidence from the Finnish forest and IT industries. British Journal of Industrial Relations, 62(2), 319–334. https://doi.org/10.1111/bjir.12781
- Kölling, A. (2022). Shortage of skilled labor, unions and the wage premium: a regression analysis with establishment panel data for Germany. Journal of Labor Research, 43(2), 239–259. https://doi.org/10.1007/s12122-022-09334-1
- Leonard, E. (2004). Négociations sur l’emploi en Europe: compromis et enjeux. Relations industrielles / Industrial Relations, 59(3), 545–568. https://doi.org/10.7202/010924ar
- Lombardi, M. J., Riggi, M., & Viviano, E. (2023). Workers’ bargaining power and the Phillips Curve: a micro–macro analysis. Journal of the European Economic Association, 21(5), 1905–1943. https://doi.org/10.1093/jeea/jvad016
- Marinescu, I., Ouss, I., & Pape, L.-D. (2021). Wages, hires, and labor market concentration. Journal of Economic Behavior & Organization, 184, 506–605. https://doi.org/10.1016/j.jebo.2021.01.033
- Morisette, R. (2022). Employer responses to labour shortages (Nos. 36-28–0001). Statistics Canada.
- Mortensen, D. T. (2003). Wage dispersion: why are similar workers paid differently? (1st ed.). MIT Press.
- Moscarini, G., & Postel-Vinay, F. (2018). The cyclical job ladder. Annual Review of Economics, 10(1), 165–188. https://doi.org/10.1146/annurev-economics-080217-053425
- Okun, A. M. (1973). Upward mobility in a high-pressure economy (Brookings Papers on Economic Activity No. 1). Brookings Institution. https://www.brookings.edu/articles/upward-mobility-in-a-high-pressure-economy/
- Scrimger, P. (2020). Unions, industrial relations and market income inequality in Canada’s provinces. Relations Industrielles / Industrial Relations, 75(2), 321–350. https://doi.org/10.7202/1070351ar
- Song, J., Price, D. J., Guvenen, F., Bloom, N., & von Wachter, T. (2019). Firming up inequality. The Quarterly Journal of Economics, 134(1), 1–50. https://doi.org/10.1093/qje/qjy025
- Stahl, C.-M. (2022, July 11). Labour shortages offer trade unions valuable opportunity. Social Europe.
- Zwysen, W. (2023). Labour shortages—turning away from bad jobs (ETUI Policy Brief No. 2023.03). ETUI.
- Zwysen, W., & Drahokoupil, J. (2024). Collective bargaining and power: wage premium of collective agreements in Europe 2002–2018. British Journal of Industrial Relations, 62(2): 335–357.
