1. Comparative analysis on wages
PERC Economists network meeting “Wage policy forum” May, Chisinau (Moldova)
Comparative analysis on wages
in the SEE/NIS
Bruno S. Sergi
University of Messina

2. Inequality in Eastern Europe and CIS transitional economies
Inequality in Eastern Europe and CIS transitional economies. It comes from the past
In Eastern Europe, changes in the distribution of income and wealth associated with the restoration of market economy, privatization of state assets.
The political implications are country specific, as the countries are diverse in terms of size, level of development, historical background, and social and political structure.
After drastic increase in income equality during the market liberalization period, some Eastern Europe nations have improved or maintained the same level of the Gini coefficient since 2000 due to economic growth, effective fiscal redistribution for social service.

3. What has occurred in the past
What has occurred in the past? The drop of real wages during the transition to market economy

4. Latest Gini 2012
Bulgaria
36.01
Poland
32.39
Romania
27.33
Czech
26.13
Hungary
30.55
Slovakia
26.58
Slovenia
25.59
Estonia
33.15
Latvia
35.48
Lithuania
35.15
Belarus
26.01
Moldova
29.16
Russia
41.59
Ukraine
24.74
Kazakhstan
27.43
Kyrgyz
27.35
Turkmenistan
40.77 (1998)

5. Structural Unemployment after the Transition Economics
Many eastern Europe nations inherited a relative large human capital stock from the socialist period, due to relative large investment and development in all stages of education.
The increase in inequality resulted from increase of unemployment due to underinvestment in human capital.

6. Labor productivity in Eastern Europe, 1996–2015

7. Working age population growth

8. Current Trend in Central and Eastern Europe (Nov 2016, IMF)
Economic growth remains solid in much of Central, Eastern. In Russia, the pace of economic contraction has moderated, as the economy appears to have adjusted to lower oil prices and the sanctions shock. Other CIS economies are gradually exiting from recessions on improved external demand.

9. Current Trend in Central and Eastern Europe (Nov 2016, IMF)

10. Unemployment is reaching pre-crisis lows, wages have been growing at a strong pace for some time, and the current account balances have begun to deteriorate again.

11. WAGES
SOURCE: ILO database

12. And today? Let’s kick off our discussion!
SEE.

16. Minimum and average wage growth
Minimum wages since 2012 have been rising faster than average wages in most CESEE countries. The pace of increase has been sharp particularly in Turkey, and some Baltics and SEE-EU countries. Based on limited available data, about 10-20% of workers earn the minimum wage in CESEE. Minimum wage hikes could contribute to overall wage growth directly and indirectly through spillovers. About 1⁄4 of average wage growth in CESEE countries over is associated with minimum wage developments.
SEE.

18. Gross average monthly wages

19. Gross average monthly wages

20. Wages,

21. Wages,

22. Losers and winners

23. Losers and winners Turkey -18,31 Greece -16,33 Hungary -1,98 oecd 4,50
Slovenia
17,56
Finland
17,66
Poland
25,73
Czechia
27,96
Montenegro
31,75
Croatia
31,86
Slovakia
36,75
Bosnia and Herzegovina
44,21
Serbia
64,22
The former Yugoslav Republic of Macedonia
67,02
Russian Federation
84,46
Albania
89,31
Ukraine
90,08
Belarus
93,61
Lithuania
95,73
Moldova, Republic of
146,41
Romania
149,47
Latvia
152,87
Armenia
239,54
Georgia
252,22

24. Wages vs GDP and Productivity
Note: wages in US$ at current Exchange Rates

40. The role of economic growth and productivity
There are 4 factors o f production that influence economic growth within a country:
Natural Resources available
Investment in Human Capital
Investment in Capital Goods
Entrepreneurship

41. https://www. conference-board. org/retrievefile. cfm

42. Growth of Labor Productivity, Persons Employed and Real GDP for Major Emerging Economies, 1999-2016

43. Trend growth of Labor productivity (output per person) using HP filter, Major Regions, 1971-2015

44. Growth of Labor Productivity and TFP, Major Regions, 1999-2015

45. How will important variables change in the region?
Looking forward:
How will important variables change in the region?
GDP structure, growth, and inflation.

46. Albania

47. Bosnia and Herzegovina

48. Bulgaria

49. Hungary

50. Macedonia

51. Moldova

52. Montenegro

53. Romania

54. Serbia

55. Ukraine

56. Europe & Central Asia

57. GDP, unemployment and inflation forecast

58. GDP forecast

59. Unemployment forecast

60. GDP forecast

61. GDP

62. GDP

63. CPI inflation

64. CPI Inflation

65. CPI inflation

66. Unemployment

67. Unemployment

68. Unemployment

69. Countries’ experience

71. Bulgaria

72. Bulgaria

73. Bulgaria average monthly wages in manufacturing

74. Bulgaria wages low skilled jobs

75. Croatia

76. Croatia

77. Hungary

78. Hungary

83. Macedonia

84. Macedonia real wage growth

86. Moldova average monthly wages in manufacturing

88. Romania average monthly gross wages in manufacturing

89. Ukraine

94. Hints for discussion Any explicit, numerical goal for wages increase?
High and low skilled jobs ….and their wage policies?
Note different domestic economic and productive realities.
Towards sectoral-based wage increase policies?

95. Thank you