The ‘battle’ for wages begins: the employers part of 2.5% and the unions claim 5%

  • The CEOE, CCOO and UGT begin express negotiations to close a rent agreement before the end of the month to share the cost of the inflation scale

The battle for salaries has started and patronal and unions They give this Thursday the starting signal for the negotiations to define how to share the cost of the highest escalation in inflation in 30 years. And taking into account the claims of the parties, this battle is going to resemble a ‘blitzkrieg’ -lightning attack-, since the intention is to have the pact closed before the end of March. The CEOE, CCOO and UGT have begun talks to renew the State Collective Bargaining Agreement (AENC), an agreement of agreements that sets the guidelines for salary increases. The employer’s association starts from a fork near the 2.5%while the unions demand a 5%; although one of the keys to the negotiation will be the salary review clauses to gradually adapt these brackets to the runaway and uncertain inflation, which is currently at 7.4%.

“The reality is that we are at war and in the war we cannot think that it only affects a few when right now it is going to affect us all. It is a very important moment to make a salary containment”, declared the president of the CEOE, Antonio Garamendi, this Thursday in an act of the bosses. Russia’s invasion of Ukraine has precipitated the talks, which were already scheduled to begin on March 3, as EL PERIÓDICO anticipated, but which will have a much shorter duration than initially proposed by the parties. The effects of the war are uncertain for the economy and the social agents prefer to light up cold pacts before knowing new CPI data that could further complicate the conversations.

The President of the Government, Pedro Sánchez, sent a message to the negotiators a day earlier and urged them to agree on “a great income pact”, for moderation of benefits and wages, “to avoid falling into an inflationary spiral”. From entities like the Bank of Spain they have also bombarded social dialogue with similar messages, fearful of fueling an inflationary spiral. “Wages have not produced inflation, they suffer from it. They cannot be the pagans,” defended the secretary general of the CCOO, unai deaflast week on a visit to Barcelona.

The crux of the conversations that begin this Thursday is how to distribute the escalation of prices, whether on the purchasing power of wages or on business margins. As they ended up being the previous year, which ended with an average CPI of 3.1%, compared to a salary increase agreed by agreement of 1.5%.

“[Entre los trabajadores de] CEOE the salary increase has been 2.5%, because we think that we are the first to set an example”, Garamendi declared this Monday, although the employers have not formally publicized their proposal. UGT has done so, which has located its withdrawal figure in an increase of 5%, something that the central considers “moderate” given the current inflation. “It is not reasonable”, the leader of the employers has replied before starting a negotiation that will include more elements apart of salaries.

Salary revision clauses

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Given the uncertain and runaway inflation, the generalization of wage review clauses will be one of the key fronts in this battle for wages. This was a decisive tool precisely in the negotiations of the 1990s, also in the midst of an inflationary storm. In 1989, for example, inflation was 7.4% and salary increases agreed upon by agreement were 7.7%, according to data from the Ministry of Labor. At that time, it was common practice for negotiators to start from the official forecasts for the evolution of the CPI and agree to annually review the differences between what they had agreed to and the figure to which they had finally increased prices.

The unions assume the generalization of these wage review clauses as a red line, something that was frequent in the labor market until the labor reform of the PP. Then fell the ultraactivity of the agreements and one of the tokens sacrificed in the negotiation of subsequent specifications was those revision clauses. Currently around 16% of wage earners are covered by an agreement with a review clause, according to Labor data.

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