Abstract
This contribution questions the influential interpretation that strong unions and centralized wage bargaining facilitate wage restraint and that during the postwar period wage restraint was an important cause of strong economic growth performance. This view is contrasted with a power-oriented perspective that sees strong unions as conducive to redistribution from capital to labour, rather than wage restraint. The paper uses data on wages and productivity from 1950 to 2010 for Belgium, Germany and the Netherlands, and shows that there has been more wage restraint after 1980 than before, and not more with more bargaining centralization. The results support the power-oriented understanding of wage bargaining institutions and suggest that the causes of wage restraint, its effects on investments and inequality should be reconsidered. (Less)
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