Negotiating wage (in)equality: changing union strategies in high-wage and low-wage sectors in Czechia and Slovakia

Abstract

Reducing wage inequality requires an understanding of the importance of labour market institutions, in particular statutory minimum wages and sectoral collective bargaining. This article argues that the impact of labour market institutions on wage inequality is enhanced by specific strategies of unions and employers. Empirical evidence is provided from the high-wage automotive sector and the low-wage retail sector in Czechia and Slovakia. Against the backdrop of the erosion of collective wage bargaining, trade unions have prioritised increases in the national statutory minimum wage as a mechanism for reducing wage inequalities. Trade unions’ leverage on minimum wages can compensate for their declining influence on wage distribution via collective bargaining.