卢森堡的工资竞争力（英文版）.pptx

1,Wage Competitiveness in Luxembourg.,Stefan Collignon and Piero Esposito,A Study engaged by the Government of the Grand Dutchy of Luxembourg,In respect of the Project,Wage Imbalances in the European Labour Market.,London, 29 September 2016,2,Contents,Introduction. 3A new measure for wage cost competitiveness. 5Aggregate values and comparison with other EU countries. 8Sectoral breakdown. 11Conclusions. 17Annex - Equilibrium wages for selected manufacturing industries and Trade and repairs. 19Works Cited. 19,Abstract,We propose a new method for estimating the competitiveness of wages in levels and not as usually done byunit  labour  indices.  We  define  a  new  measure  for  equilibrium  wages  and  find  that  overall  theaverage labour cost level in Luxembourg was nearly 30.000 per year below this equilibrium.,We  then  analyse  sectoral  wages.  It  appears  that  the  competitive  advantage  in  Luxembourg  isconcentrated in ITC, financial and public administration sectors.  The manufacturing sector seemsto be handicapped when compared to the average return of the Luxembourg macro-economy, butwhen it is compared to the European manufacturing sector, it is very close to equilibrium.,We conclude by asking some questions about the future evolution of the Luxemburg model.,3,Introduction,The  debate  about  the  competitiveness  of  member  states  in  the  Euro  Area  has  become  moreintense, and more controversial, since the Global Financial Crisis and the subsequent Euro crisis.Improving competitiveness is often seen as synonymous with wage cuts and austerity. However,lower  wage  costs  do  not  always  improve  competitiveness.  First  of  all,  competitiveness  canimprove  even  when  wages  are  rising,  provided  productivity  improves  as  well.  Second,  whenausterity   reduces   effective   demand,   productivity   will   slow   down   and   this   may   cause   adeterioration  of  competitiveness.  Hence,  assessing  an  economys  labour  cost  competitivenessrequires a more comprehensive analysis that integrates wage bargaining with productivity andgrowth theory.,Measuring wage competitiveness is difficult. Eurostat produces a number of indicators based onnominal and real unit labour costs and compares them to other countries or country groups, buttheir informational content is uncertain and even sometimes contradictory. Figure 1 shows theunit labour cost (ULC) indices for Luxembourg and its immediate neighbours France, Germany andBelgium as published by the European Commissions AMECO data base. All time series are basedon the year 2010. It looks as if nominal unit labour costs have increased much more rapidly inLuxembourg than in neighbouring countries since the start of European Monetary Union in 1999.Hence, one would conclude that the Grand Duchy has lost competitiveness against the 16 mostimportant EU member states and against 34 industrialized countries. By contrast, Germany andthe Euro Area in general seem to have improved their relative positions. After the financial crisis in2008,   wage   increases  have   slowed   down.   In   nominal   terms   the   competitiveness   loss   forLuxembourg relative to the Euro Area is similar to most neighbouring countries, although Germanwages are now increasing much faster. However, when we look at real unit labour costs, which arethe same as the wage share, the picture is inverted. If we discard the peeks and shocks of thefinancial crisis, there is a broad improvement in the labour cost competitiveness of Luxembourgbecause the wage share has fallen and the profit share has increased.  So which index gives  abetter picture of these competitive developments?,In this paper we look at a new method for assessing the competitiveness of labour costs in theEuro Area and apply it to the case of Luxembourg. We define a new measure for equilibrium wagelevels and find that overall the average labour cost level in Luxembourg was nearly 30.000 peryear below this equilibrium. This is dramatic. We then analyse sectoral wages. It appears that thecompetitive advantage in Luxembourg is concentrated in ITC, financial and public administrationsectors.    The  manufacturing  sector  seems  to  be  handicapped  when  compared  to  the  averagereturn   of   the   Luxembourg   macro-economy,   but   when   it   is   compared   to   the   Europeanmanufacturing sector, it is very close to equilibrium. We conclude by making some suggestionshow to deal with this situation.,Figure 1. Nominal and real Unit Labour Indexes (2010=100). Absolute and relative measures.,Source: own elaboration on Eurostat4,12011010090807060,92,94,96,98,00,02,04,06,08,10,12,14,16,Nominal ULC,110.0107.5105.0102.5100.097.595.092.590.0,92,94,96,98,00,02,04,06,08,10,12,14,16,Real Unit Labour Costs,858075,110105100,92,94,96,98,00,02,04,06,08,10,12,14,16,Nominal ULC relative to 16 EU countries,95.092.590.0,102.595100.09097.5,110.0107.5105.0,92,94,96,98,00,02,04,06,08,10,12,14,16,Real ULC relative to 15 EU countries,1401301201101009080,92,94,96,98,00,02,04,06,08,10,12,14,16,Nominal ULC relative to 34 industrial countries,1061041021009896949290,92,94,96,98,00,02,04,06,08,10,12,14,16,Luxembourg,EA17,France,Germany,Belgium,Real ULC relative to 37 industrial countries,A new measure for wage cost competitivenessThe trouble with measuring labour cost competitiveness by ULC indices as in Figure 1 is thearbitrariness of the base year of the index. Because we do not know whether a particular economywas in equilibrium in the base year, this can lead to misleading judgements if the index indicatesrapid increases, when the country started out from an undervalued or overvalued position. Wetherefore need a benchmark for wage levels and not for the wage dynamics.Starting with the simple assumption that in a market economy competition allocates capital towhere it generates the highest return so that in equilibrium the rates of return on capital ought tobe at the same level, we define the equilibrium wage as the total labour compensation level, atwhich the average return on the capital stock is equal to the average return in the Euro Area as awhole. We will calculate this relative return with respect to  the economy of Luxembourg as awhole,  or  for  given  sectors  such  as  manufacturing  or  financial  services.  It  is  important  toemphasise  right  from  the  beginning  that  this  equilibrium  wage  is  a  benchmark  derived  fromcapital market theory, and does not reflect a labour market clearing equilibrium wage. However,there  is  no  automaticity  that  the  equilibrium  prevails  in  the  short  run,  as  the  Varieties  ofCapitalism literature (Hall, Peter A. und David Soskice, 2001) has demonstrated.The gross return on capital is the ratio of non-wage value added relative to the historic value ofthe aggregate capital stock of a country or sector. It also includes the part of value added that isused to substitute the consumed capital. In order to obtain a measure of net return on capital,which is what matters from the point of view of an investor, consumption of fixed capital (cfc) issubtracted from non-wage value added.,(1), =,Where PY is nominal GDP, w is average wage compensation, L is the employment level, Pk is thecapital stock deflator and K is the capital stock in constant prices. We also define nominal labourproductivity as nominal output per person employed,(1b), =,By multiplying and dividing equation (1) by nominal GDP, the return on capital can be expressed asthe product of the net capital share and the average capital efficiency (ACE):,(2), =,              ,= ,Where k is the net capital share and ACE is the ratio of nominal GDP to nominal capital stock.Our  equilibrium  condition  is  that  a  countrys  or  sectors  net  return  on  capital  is  equal  to  theaverage level in the Euro area:5, =, , ) = (1 , ) ),Unit labour costs are defined as the wage costs per unit of output: =, =,=,=  ,See: (Stockhammer, 2015),=    . Hence real unit labour costs are,6,(3), = ,The equilibrium wage share of a country or sector is then:,(4),=1,The wage share is identical with real unit labour costs,1 so that equation (4) also represents acountrys equilibrium real unit labour costs. Thus, if a countrys capital productivity is higher than,the  average  European  capital  productivity,  so  that,< 1,   its  equilibrium  wage  share  (and,therefore in equilibrium a countrys real unit labour costs) will be above the Euro Areas. This is thesame as saying that a larger share of value added can be used to remunerate labour becausecapital is more productive. On the other hand, if in some countries the labour share has fallen overtime,  this  may  simply  reflect  lower  capital  productivity.  Assuming  equilibrium  as  a  startingposition, voluntarist increase in wages, as suggested by wage-led growth theorists,2 would onlygenerate deviations from equilibrium and harm competitiveness.We can now solve equation (4) to obtain the equilibrium nominal wage level w*:, (1 ,(5)where   =, = = (1 ,It is clear that the equilibrium wage so defined is a function of the average wage share in the EuroArea,  national  or  sector  specific  labour  productivity  and  the  relative  development  of  nominalcapital productivity, i.e. relative prices of goods and capital and the national (or sectoral) capital-output ratio relative to the Euro Areas. An additional factor is the consumption of fixed capital,but this depends on the level of economic activity and on the nature of the capital stock, hence wecan consider it as derived from the other variables in the equation.  Nevertheless, because thedestruction (write-off) of capital during a crisis may cause significant reductions in equilibriumwages, as is evident from Figure 2 (cf. 2000 and 2008-9), equilibrium wages can be rather volatile.To   measure   competitiveness,   we   will   match   the   actual   labour   compensation   against   theequilibrium wage. We calculate an index of relative competitiveness as a ratio and show absolutecompetitiveness as the gap between actual and equilibrium wages. If actual wages are higher thanthe equilibrium wage, the return on capital in a particular country or industry will be lower thanthe Euro-average. We interpret this as a competitive disadvantage, for lower profitability is likelyto deter investment until the return on capital is improved, while highly competitive sectors andcountries would attract capital and boost economic growth until over-accumulation reduces thereturn. Hence, wage cost competitiveness depends on actual wages as they emerge from wage,              ,12,See (Koll, 2005) (Commission, 2005),7,negotiations  and  on  structural  factors  that  shift  the  equilibrium  wage. It  also  depends  on  theaverage wage share of the Euro Area, i.e. on how aggregate wages develop relative to inflationand productivity in the Euro Area as a whole. If a particular region or industry deviates from theaverage performance, it will gain or lose competitiveness.   This means that if wage increases areslowing down in the Euro Area as a whole, all countries will have to follow suit if they wish toremain competitive. This was the case during the first decade of Monetary Union, as Figure 1shows,  because  German  wage  restraint  kept  the  average  wage  costs  in  the  Euro  Area  down,although this has changed during the Euro Crisis.,Our  concept  of  equilibrium  wage  defines the  limits  for  wage  increases  that  are  consistent  forstimulating  demand  and  pursuing  a  wage-led  growth  strategy.  The  famous  Rehn-Meidner  rulerecommended  that  nominal  wages  ought  to  increase  at  the  rate  of  labour  productivity  plusinflation, so that the wage share remains constant. In the Euro Area that has been amended to saythat wage increases should take into account labour productivity and the inflation target of the,ECB.3 However, this rule ignores the impact of capital productivity on equilibrium wages. Balanced,growth across countries and sectors would require that nominal wages are equal to equilibriumwages.,As equation (5) shows, the effect of capital productivity on equilibrium wages is far from trivial.Even if all countries had exactly the same rate of nominal wage increases in line with the Rehn-Meidner  rule,  their  competitiveness  could  still  be  distorted  by  diverging  capital  productivitydevelopments. Such divergence may be a consequence of broad country-specific factors, such asinfrastructure,  R&D,  skill  building,  etc.,  but  it  may  also  reflect  different  weights  of  economicsectors with diverse capital-output ratios. For example, it is well-known that productivity is morelikely to improve in manufacturing than in most service industries, so that an industrial hub likeGermany is prone to reap larger competitive advantages than service intensive economies. Forthis reason, it is important not only to analyse aggregate but also sectoral equilibrium wages.,3,Lehman,Aggregate values and comparison with other EU countriesFigure 2 shows the evolution of wages costs in Luxembourg.  Actual wages are structurally belowthe equilibrium level and the comparative advantage has increased after the Global Financial Crisiand during the Euro crisis. Actual wages are more stable than the equilibrium wage, which reflectschanges in capital productivity, as we will explain below.Figure 2.  Luxembourg: actual and equilibrium wage10090807060504030,96,98,00,02,04,06,08,10,12,14,16,Average wage (Compensation per employee)Equilibrium wageSource: own elaboration on STATEC, Eurostat.Figure  3  shows  the  competitiveness  index,  defined  as  the  ratio  of  actual  to  equilibrium  wagelevels, for the aggregate economies of Luxembourg, France, Germany and Belgium. With smalloscillations, wages in Luxembourg have kept a stable gap of 30 percent below equilibrium for thelast 20 years. This is different for the neighbouring economies. In Germany, wage costs were 12%above equilibrium in 2000, but have since fallen below equilibrium stabilizing around minus 4%. Bycontrast, France has lost its initial competitive advantage of 6% below equilibrium and is now 6%above.   Thus   the   shifts   in   competitiveness   are   a   deterioration   of   12%   in   France   and   animprovement  of  16%  in  Germany  since  monetary  union  started.  In  Belgium,  wage  levels havestabilized slightly below but close to equilibrium.8,