Wage increases in the European Union do not match productivity growth, according to calculations by the European Trade Union Institute (ETUI) and European Trade Union Confederation (ETUC).

The new figures showed that wage increases in the European Union over the last 16 years would have been four times higher if they had fully reflected productivity increases in accordance with standard economic theory.

Croatia is among the countries where productivity increased threefold compared to wages, alongside Germany and Ireland. Productivity increased two times more than wages in Poland, Belgium, and Austria.

In the European Union, labour productivity in 2016 was 10.5 percent higher in real terms than in 2000, while at the same time wages increased by a mere 2.45 percent.

“Wage increases have been lagging behind for years. The wide gap between productivity increases and wage increases provides solid proof of the need for pay rises for working people across the EU,” said the ETUC Confederal Secretary, Esther Lynch.

“Fair collective bargaining needs to take place between trade unions and employers across Europe to achieve decent and sensible pay rises. Governments and EU institutions should be doing all they can to enable and encourage collective wage negotiations,” she added.

The European trade union organisations say that lessons should be learned from member states where wages increased more than productivity. This is the case with Denmark and Sweden, where sound economic development and a high degree of competitiveness go hand in hand with wage increases.

The unions said that workers do not receive their fair share of the produced wealth if wages are persistently lagging behind productivity, which is not only deeply unjust, but also damaging to the economy. Slow wage growth negatively affects spending, which is one of the main elements of GDP, the unions added.