transparency of wages, worldwide: why is it needed? the wageindicator conference 16 april amsterdam...
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Transparency of wages, worldwide:why is it needed?
The WageIndicator Conference 16 April Amsterdam
Manuela Tomei and Sangheon LeeConditions of Work and Employment ProgrammeInternational Labour Office
Why transparent data?
Why transparent? To maximise the use of wages data (from macro-
economic policies to individual wage bargaining), transparency is the key
Urgent and huge demand for transparent occupational wage data
Transparency in: Procedure: the way in which data are collected
(reliable and “participatory”) Data processing Dissemination: “public goods” available to all members
of the society in an easy and time-effective manner
Why data? (I)Economic theories, information, and labour market failures Theories typically assume that individual workers
know how much others are earning (“perfect information”) They all know what are “prevailing market wages”, or do
they? If this is not the case, the labour market can fail
“Ignorance may prevent workers from moving from one to another in response to differences in the wages offered by the different firms” (Joan Robinson 1933)
Efforts have been made to address this problem By public authorities (e.g., labour market information
service) More traditionally by trade unions (e.g., occupation
unions) Yet, information on detailed wages has not been
easily available to workers
Why data? (II)Help determine decent and fair wages
Mutual interest in transparent and reliable data In job search, a good knowledge on current
wages help workers make informed decisions In wage negotiations, the availability of wage
data on their counterparts in other companies facilitate negotiations, potentially preventing “unfairness” (or “exploitation”)
Employers can enjoy similar advantages by making wage determination fairer and more transparent An employer who would like to cut wages (for apparently
understandable reasons relating to market situations) told that he could not do it because “it would be too hard to explain to workers in a reliable and convincing manner” (Bewley’s study on wage rigidity 1999)
Why data? (III)Promote and facilitate collective bargaining
Reliable and transparent data are the key for launching collective bargaining and ensuring productive and effective dialogue
Create “trust” on wage data (“I don’t believe your dodgy data, and my data says the opposite”)
Improve national wages policies
Why data? (IV): “Go Global”Making global debates more grounded: Social dumping? Upgrading? Increasing interest in wages in other
countries (e.g., China) where even official macro statistics remain poor
Rhetoric dominates without much empirical grounds
This is critical and unfortunate, as wages are the key dimension of job quality for workers and the major determinant of labour costs for employers
Why data? (V): “Go Global”Better address key policy issues
Internationally comparable data are not readily available to address key issues Pay equity and discrimination Minimum wages: awareness and effects Others
Tense debates on wages are expected, as inflation (coupled with recession?) accelerates in most countries. What to do? Wage moderation vs. keeping purchasing
power of wages
Then, where do we stand?Reality check
International statistics: insufficient to meet the goals ILO statistics on wages earning by economic activities ILO’s October Inquiry on occupational wages (Freeman
and Oostendorp 2001) National statistics
“Statistical divide”: industrialized vs. developing countries
Even in industrialized countries, more need to be done from the perspective of “transparency” (three dimensions)
A new initiative: Global Wage Trend Report
Global WageIndicator ProjectPotential contributions and impacts
A pioneering initiative to address the challenges relating to wage statistics Most updated data on “prevailing market” wages Easy access and wide dissemination Participatory approach (no problem of “free-rider”)
While attempting to meet the criteria of “transparency” in wage statistics: especially, Easy access and wide dissemination Participatory approach (no problem of “free-rider”)
Inputs to national and global debates (e.g., ITUC report on pay equity)
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