Rigid wage-setting alone cannot account for Spain’s poor productivity growth.

A similar wage-setting equation is required for the resource sector.

"At the same time they also suggest we're seeing the impact of tight labor markets on wage-setting," he said.

And finally, cheaper imports are having an indirect effect on wage-setting in the service industry by holding down the cost of living.

Wage-setting and labor power, once deeply divisive election year issues, are barely mentioned.

We therefore explicitly model the union wage-setting process in a median voter framework.

The country also has a managed system of wage-setting that fails to make enough allowance for different productivity levels across the economy.

An attempt is being made here to champion a European wage-setting policy which would increase existing national minimum wages by an average of 20%.

These are likely to fade—unless firms and employees start to factor high inflation into their price- and wage-setting.

It is imperative to avoid broad-based second-round effects in price and wage-setting.

The social impact is going to be the biggest worry given the inflexibility of wage-setting in the region,' Yousuf said.

He said it was imperative that "second round effects on price and wage-setting from current inflation rates are prevented.

It would pave the way for government wage-setting and damage the foundations of our successful market economy.'

Wage-setting needs to take into account productivity developments, the still high level of unemployment in many economies, and price competitiveness positions.

Policies to promote high employment must take into account countryspecific wage-setting institutions and monetary regimes.

This perverted flexibility has also been facilitated by specific public- and private-sector wage-setting institutions and policies.

A national wage-setting scheme.

This has established an environment of price stability in the euro area, exerting a moderating influence on price and wage-setting.

Its latest report says, "Labor market reforms need to facilitate appropriate wage-setting and labor mobility across sectors and regions."

They suggest that wage-setting could be made more flexible if deals struck at the level of individual firms were allowed to prevail over regional or industry agreements.

Most formal models of trade union wage-setting behaviour are unable to answer questions about membership for the simple reason that they assume membership is fixed at 100%.

One reason is that, particularly in the euro zone, Brussels is intruding ever deeper into national life, meddling in everything from budgets to pensions and wage-setting.

More flexibility in wage-setting and employment terms and some shift in social charges off employment on to direct taxes are the key prizes business is hoping for.

The waiving of the scala mobile, following the tripartite agreement of July 1992, was ratified by the agreement concluded 12 months later on a new wage-setting method.

However the ECB, in a statement accompanying the rate cut, reiterated that it remained imperative to avoid broad-based second-round effects in price and wage-setting. '