Portuguese paper analyses crisis impact on union agreements

The number of workers covered by new and existing collective agreements has remained largely unaffected by the financial crisis, finds a working paper published yesterday by the Bank of Portugal.

In Unions and collective bargaining in the wake of the great recession, John Addison, Pedro Portugal and Hugo Vilares provide an estimate of union density in Portugal between 2010 and 2012.

Despite an unambiguous shift in bargaining momentum that has led to far fewer collective agreements and extensions in the wake of the economic crisis, the authors find that "coverage by collective agreement is largely unaffected once one accounts for the stock of existing contracts".

The reduced frequency of new agreements and extensions is instead "attributed to downward nominal wage rigidity in deflationary times, rather than (as yet) the expression of a crisis in collective bargaining," they noted.