Sidste år førte coronakrisen og lockdowns til relativt store stigninger i timelønningerne, men det vil blive udlignet, når der sker en genåbning, og genåbningen vil især føre til lavere aftalte lønninger – dét, der spiller ind i inflationen. Lønningerne har været faldende fra midten af 2019 til 1,9 pct. i fjerde kvartal sidste år, og ABN Amro venter yderligere fald i år.
Eurozone wage growth distorted by lockdowns
Euro Macro: Labour costs shoot higher, but underlying wage growth subdued –
Eurostat har published its report on quarterly hourly labour costs for 2020Q4. The total hourly labour costs are corrected for the income received by companies from government subsidised short-time work schemes, implying that they reflect the labour costs that are actually borne by companies themselves.
Total labour costs increased by 3.0% yoy in 2020Q4, following a rise of 1.6% in 2020Q3. The breakdown of the main components shows that the rise in hourly wages and salaries jumped to 3.5%, up from 2.2% in Q3, while non-wage labour costs rose by 1.5% yoy in Q4, up from -0.3% in Q3.
The breakdown by sectors clearly illustrates that the jump in hourly wage growth is largely driven by changes in the number of hours worked during lockdown. Indeed, hourly wage growth increased the most in the services sector in Q4, as new lockdown measures were introduced as from November onwards.
The jump in hourly wage growth in services in Q4 followed upon a sharp decrease in Q3, when large parts of the services sector had been allowed to re-open, albeit with social distancing measures.
Considering the significant impact of the number of hours worked the Eurostat measure of labour costs, they should drop sharply lower in the second half of this year, when we expect the current lockdown measures to be unwound and the number of hours worked to shoot higher.
Hourly labour costs have accelerated the most in services in Q4, % yoy
Source: Thomson Reuters Datastream, Eurostat
Negotiated wage growth has slowed down, % yoy
Source: Thomson Reuters Datastream, ECB
Besides the hourly labour cost data published by Eurostat, a wide variety of alternative measures for wage growth are published by the ECB, for instance wages per employee and negotiated wages.
The change in negotiated wages is the wage growth measure that is preferred by the ECB as it excludes the impact of wage-drift and one-off factors. It tends to reflect changes in supply and demand for labour and the resulting bargaining power of employees.
As such, it is a good indicator for the tightness in the labour market and underlying wage pressure, which in turn is a main driver for inflation in the medium term.
The graph above shows that negotiated wage growth has slowed down noticeably since the middle of 2019 (from 2.6% in 2019Q3 to 1.9% in 2020Q4). Looking forward we expect negotiated wage growth to fall further in the coming quarters as a lot of slack has built up in the eurozone labour market since the start of the pandemic, which will limit underlying wage growth.
