Inflation impacts agreements: in three months the salary increase jumps from 1.5% to 2.3%

  • Eight out of 10 workers covered by the agreement lose purchasing power in the face of the runaway CPI

At the expense of whether the bosses and unions manage to close a new salary agreement for the coming years, sector by sector, the negotiators are closing new collective agreements in which the impact of the inflationary escalation is already evident. According to data published this Thursday by the Ministry of Labor, the agreements signed until February accumulated an average wage increase of 23%. In just three months, this percentage has climbed eight tenths, since in December it closed the year at 1.5%. Despite the increase registered in recent months, the majority trend is that workers continue to lose purchasing power. Specifically, eight out of 10 workers covered by the agreement had a wage increase below the current levels of the CPIcurrently in the 7.4% and going up, as well as from the Underlying inflationwhich subtracts the impact of energy and is around 3%.

The pandemic, first, and the inflationary escalation, later, are weighing down collective bargaining in Spain. As of February this year, agreements have been renewed that cover a total of 4.3 million workers. In the same month of 2019, this figure amounted to 6.2 million people. The lack of a framework agreement to guide sector-to-sector and company-to-company talks makes it more difficult to close agreements, and the current inflationary context makes this agreement even more difficult. Well, the unions start from figures so as not to lose purchasing power and the companies are usually not willing to go that far and they get stuck, leaving the agreement without renewing.

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Most of the agreements are closing with a range of between 1 and 2%, increases substantially below the CPI and that affect seven out of 10 workers. Only 17% of the sheets have an increase above 3%. One of these most recent agreements is that of the poultry and rabbit slaughterhouses, where this week employers and unions closed a salary revision of 8.1% for 2021 and an increase of 4.25% for 2022. Although it is one of the highest increases among those that have been known in recent weeks, it does not reach the current levels of inflation.

One of the formulas that have historically shielded that purchasing power are the salary review clauses, which force companies to compensate the difference with the CPI afterwards. Firms like Mercadona, for example, have it by agreement and this caused them to raise their workers’ salaries to 6.5% in January. However, the existence of such clauses is not without controversy and in other agreements, such as the metal or the one of Barcelona metallographic, the companies are resisting to apply the increases immediately given the escalation of the CPI in recent months. Both examples are in legal proceedings after the complaint of the unions. In Spain, according to calculations by the Ministry of Labor, the 16% of workers covered by agreement are covered by one that incorporates salary review clauses.

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