1) Theory and literature of reducing the wage gap
a) Economic and economic policy considerations and objectives
In the first part of the research we analysed the main features of wage gap reduction as a result of spontaneous market trends in the conditions of the market economy as well as the possibilities of influencing it by economic policy measures in the following fields:
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i) general macro economic and labour market trends,
ii) macroeconomic and income policies (taxes, contributions etc.), fiscal policy, etc. ,
iii) the system of wage formation of public organisation and institutions,
iv) governmental commitments: " wages have to converge to the European level ?"
v) the need for harmonisation (on one hand, the wage is one of the most important element of the income and the living standards of households in terms of earnings, pensions, etc., on the other one it is a dominant factor of costs, competitiveness, and profitability.
2) International comparison, examples
a) Past activities, regulations, samples etc.
We analysed the general income relations of six countries (Germany, Switzerland, Spain, Italy, Austria and the Netherlands) and Hungary in the transport sector in general and railways in particular including figures relating to engine-drivers for the period 1998-2007.
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i) gross average earnings,
ii) net average earnings,
iii) minimal wage,
iv) gross labour costs,
v) number of employees.
There is no statistical figures for the European wage level or the European average wage, therefore we compared the national figures using the following methods:
The calculated value on exchange rate parity: the value of indicators in a country denominated in domestic currency (eg.: Forint) converted into another currency at the official exchange rates (eg.: to euro). In general euro is the common currency in the EU.
Purchasing power parity: an indicator used to rule out the effects of price level differences. An index calculated at purchasing power parity (PPP) eliminates the price level differences among countries, and show the value of GDP or wages of a country compared with a given consumers basket.
3) The real objective of reducing the wage gap
a) Forecast, proposed time frame for the catching-up of wages
Based on the analysis of past trend and the projection of Hungary?s economic development trends as well as the experiences of the reference countries we made proposals for the sequencing and the time frame of diminishing the wage gap.
