Pay gap between new and old European Union member states shrinks as wage inflation soars in new EU countries

The pay gap between the 15 older member states of the European Union (EU) and the 12 new member states is closing rapidly, according to a report.

Eurofound, an advisory EU body, found the average nominal pay was 3.1 times higher in the new EU states than in EU15 in 2006 and the real wage increase was 6.5 times higher.

EU15 refers to the countries that were members before the expansion of the EU to incorporate 10 more members in May 2004.

However, the report highlighted considerable differences between the old and new member countries.

In the former EU15 countries, the average increase in 2006 stood at 2.9%, up from 2.8% in 2005, while the rate of real increase rose from 0.6% in 2005 to 0.8% in 2006.

The average increase in the 12 new member states rose from 7.5% in 2005 to 9.1%.in 2006, and the rate of real increase climbed from 3.5% to 5.2%.

When adjusted for inflation, the average collectively agreed wage increase across all 27 EU member states was 2.7% in 2006, up from 1.9% in 2005.