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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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The OECD contends that wage-price spiral risks are lower now than in previous inflationary periods.
"Since (the 1970s), in most countries, wage indexation mechanisms have been removed, which now likely to prevent a price-wage spiral."
- Structural shifts away from wage indexation and stronger employer power in capping wages due to more concentrated industries and lower unionisation have reduced employee bargaining power. Trade union density has been declining across most OECD countries, the aggregate share was 20.9% in 2000 falling to around 15.8% in 2019.
- The OECD found no indication of qualitative mismatches between demand and labour supply due to the pandemic, as the strong rebound across sectors has generated an overarching quantitative supply shortage.
- Eurozone nominal wage growth has been modest, at +2.8% y/y in Q1, whilst substantially stronger in the US at 5.0%. Despite labour market tightness, real wages are forecast to continue to decline over 2022 as inflation runs hot.
- Nominal pressures should see some relief in regions such as the eurozone as migration levels pick up as over 6.5 million Ukrainian refugees will need to be absorbed. Already-tight labour markets will make this process easier.
Source: OECD
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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