About the MAINSOC project

Managing Inflation crisis through Social Dialogue

After two decades of low inflation levels and wage moderation, Europe is facing an unprecedented increase in cost of living and the risk of stagflation. The inflation shock is eroding employees’ purchasing power, particularly at the bottom of the wage scale. Calls have been made by national and EU-level actors for governments and social partners to manage the current inflation crisis through negotiated incomes policies and collective bargaining.

The objective of the MAINSOC 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 attention to the asymmetric impact on those at the bottom of the wage scale and the role of industrial relations institutions to explain differences across countries. Second, to analyse the role of government policies, social partners’ involvement, and industrial relations institutions in managing the inflation crisis, adapting to a new scenario, and guaranteeing inclusive growth in six EU countries (DE, DK, ES, IT, HU, PL).

The project will in the first place explore the impact of inflation on real wage dynamics and distribution, and the role of industrial relations institutions in explaining differences across countries. Secondly, it will explore the policy responses from governments, the involvement of social partners, including the type of incomes policy mix, the evolution of public sector wages or minimum wage dynamics. Thirdly, the project will analyse the role of collective bargaining in responding to a high inflation context, protecting those workers and sectors more affected by the cost-of-living crisis, and adapting to a new scenario of moderate inflation. Finally, the project aims to provide a set of policy recommendations to policy makers and social partners as to which policies are more effective to mitigate the distributional impact of inflation.