Discretion and (de)centralization in wage bargaining in the construction, hospitality, urban transport and waste management sectors: A study on Spain

Abstract

The Spanish model of wage setting is based on a very structured and articulated mix between law and collective autonomy. The law exercises a crucial dual role, defining on the one hand the minimum and inter-sectoral wage, and on the other guaranteeing the erga omnes extension of the collective agreements stipulated by the most representative social partners and following some procedural requirements. The coverage, as a consequence, is quite high, despite a pretty low level in union density. The legal minimum wage represents a fundamental threshold, below which no one can be paid, and in recent years - thanks also to the initiative of socialist-led governments - it has seen a series of significant increases. Today the objective, both of the unions and of the Government, is a rapid achievement of the objective defined in the EU Directive in this regard; or 60% of the national median wage. A goal that is not far away. Collective bargaining is multi-level, within the framework of national and inter-professional framework agreements, according to a concerted approach to income policy. The national sector contract plays a primary role, whereas at a decentralised level - in addition to the company level - the regional level plays a very significant role; particularly in sectors such as hospitality and municipal services: local public transport and waste collection.