In March, proposed amendments to Lithuania’s Labor Code reached Parliament. The government aims to strengthen trade unions, expand collective bargaining, and make it easier to organize strikes. According to the explanatory note of the draft law, strike activity in Lithuania remains consistently low, while in countries such as France, Italy, and Belgium, strikes are a common and effective tool for defending workers’ interests. But do collective labor conflicts actually improve workers’ well-being in the long run?
In the countries often cited as successful examples of labor activism, real wages have largely stagnated over the past decade. In France and Belgium, wage growth has hovered around 1% annually, while in Italy, real wages are now lower than they were in 2004. The pattern is clear: when economic growth stagnates, wages stagnate too. By contrast, Lithuania has experienced some of the fastest wage growth in the EU in recent years – around 10% annually – without widespread strikes or extensive collective bargaining.
Recent events also highlight the disruption to everyday life caused by strikes. Travelers passing through Munich or Frankfurt this year may have unexpectedly found themselves affected by labor disputes. In April, Lufthansa employees staged a four-day strike, canceling hundreds of flights and disrupting travel plans for thousands. This was not an isolated incident – similar strikes took place in February and March. With operations running smoothly only about three weeks per month, many passengers may now consider alternative airlines.
Ironically, Lufthansa itself was saved from collapse during the pandemic by a EUR 9 billion bailout from the German government. Despite avoiding bankruptcy, its financial performance remains weak, with operating margin below 1% in 2025. Thus, recurring strikes have not resulted in faster wage or pension increases, suggesting that such actions can undermine a company’s long-term viability without delivering sustained benefits to employees.
A broader example can be seen in Germany’s automotive industry. Structural challenges have already affected supply chains across Europe, including Lithuania, where a major supplier announced closure. Resistance from trade unions and strike-related disruptions have made it harder for manufacturers to respond swiftly to increasing competition from China. Opposition to the transition toward electric vehicles due to potential job losses in traditional engine production has further slowed adaptation. Meanwhile, competitors in China and the United States have strengthened their positions in electric vehicle production and battery supply chains, leaving European workers at a disadvantage.
While trade unions already hold significant influence in countries like Germany, Lithuania’s government is now considering expanding their role domestically. Proposed reforms would grant unions greater authority to negotiate working conditions such as remote work, working hours, and severance pay. They would also gain representation on the boards of state-owned enterprises, accounting for at least one-fifth of members. Additionally, the reforms would make strikes more impactful by extending legal warning strike duration and shortening dispute resolution timelines within companies. The expectation is that strikes would become a more powerful tool, exerting real pressure on employers rather than serving as symbolic actions.
However, employees are an integral part of companies, and their wages depend directly on company performance and competitiveness. Disrupting operations through strikes may ultimately harm the very workers they aim to benefit. It is also worth noting that labor rights are already extensively protected by existing laws and institutions, within a context of rapid wage growth across the economy.
Sustained wage growth is more likely to come not from escalating conflict, but from what has proven effective so far: business expansion and strong economic growth. These are the areas where policymakers should focus their efforts.
Written by Ernestas Einoris – Senior Policy Expert at the Lithuanian Free Market Institute