About the MAINSOC project


The EU is facing since 2021 an unprecedented increase in cost of living and inflation triggered by a combination of raise in energy prices because of the war in Ukraine, stress in international transport chains following the Covid19 crisis and the consequences of climate change on crops and food prices. This increase has not been the same across EU economies, differences explained by asymmetric reliance on imported gas and fossil fuels, the sectoral mix and production structure, or the dominant sectors of the economy.

Contrary to what happened during the Great Recession, calls have been made by international bodies to sustain real wages and mitigate the greater impact this may have on workers at the bottom of the earnings’ distribution . The low risk of entering a wage-price spiral based on developments in real wages over the last two decades, the erosion experiencing industrial relations institutions, or the low prevalence of indexation mechanisms in collective bargaining has placed fears of decline in demand and the impact on the most vulnerable groups as the main challenge facing national economies in the short term. Moreover, the European Commission has emphasised the importance of Social Dialogue and the need to strengthen it in the European Union.

There are however different roads to achieve the twin goals of sustaining real wages whilst reducing the distributional impact of inflation for the most vulnerable groups in the labour market. On the one hand, governments can rely on a variety of instruments and policy measures to achieve them, including price caps, price subsidies, income maintenance mechanisms. But most governments have two key incomes policy instruments: public sector wages and minimum wages. At the same time, they can rely on social dialogue in order to negotiate incomes policies agreements and orchestrate coordinated responses. On their side, through collective bargaining social partners have also a key role in shaping the impact of the inflation crisis on wages and wage distribution. The combination of policy responses from governments and social partners will determine the impact of the inflation on real wages (expansion or moderation in real wages), but also distribution-wise (regressive / progressive).

The objective of the MAINSOC (Managing the Inflation Crisis through Social Dialogue) project is twofold. First, to analyse the impact of the inflation crisis on real wage dynamics and wage differentials across sectors and groups of workers, paying particular attention to those with lower wages. Second, to analyse the role of government policies and social partners in managing the inflation crisis and guarantee inclusive growth in six EU countries (DE, DK, ES, IT, HU, PL).