The First Vice President and Minister of Economic Affairs, Nadia Calviño, summoned this Wednesday the majority unions and the representatives of the employers’ association to reactivate the negotiations on an income pact that distributes the damage of inflation between workers and employers. As she explained after the meeting, she has asked the social partners for a three-year agreement for “moderation” of business profits and wages.
High inflation is not only due to electricity and gasoline: Spain’s core CPI registers the largest gap compared to the EU
The economic vice president stressed that it is “essential” that “the margins of the companies [la capacidad de obtener beneficios de las ventas, que se mantiene o aumenta si se repercuten las subidas de los costes (como la energía) a los precios finales] do not grow” and says that he sees unions and employers in a position to reach the income agreement.
On behalf of the Government, Calviño has confirmed that the SMI will be raised again in 2023 until the objective of representing 60% of the average salary is reached, and that work continues to increase the Corporation Tax for the electricity sector. However, after the appearance of the economic vice president, the unions have stressed that there is no roadmap for the income agreement, and that it is also important that “fiscal measures” be taken.
Both CCOO and UGT, the majority unions present at the meeting, have been more pessimistic about the possibility of reaching the income pact. “The possibilities of an income pact remain the same as when the negotiations broke down in May, until we know what the Government understands what this agreement means, we cannot make any assessment,” they defended. The employer representatives have not appeared.
Collective bargaining is once again crucial for the Executive, since the measures to contain runaway prices are not being forceful enough. The Government defends that they have managed to subtract about 3 points from the CPI (Consumer Price Index), although, in June, this indicator registered the record progress of this crisis, when it reached 10.2% compared to the same month last year According to the data advanced by the INE, despite the cap on gas in electricity generation, the discount of 20 cents on fuel (whose inefficiency is becoming clear) or the rest of the Shock Plan, which has been recently renewed until December.
According to the theory in which the Executive is lowered, this income pact should seek “a commitment from companies to limit their profit margins” and, at the same time, “increases in multi-year salaries”, to compensate in the medium term the loss of purchasing power for families caused by inflation, whose persistence is feared due to the threat of a cut in the supply of Russian gas in the fall. Especially in the case of the poorest households.
Regarding the SMI, the unions have replied that “with or without income agreements”, this minimum floor for salaries must be increased according to the previously agreed route. “The Government should already take a step with courage on the SMI”, they have influenced.
This same Wednesday, before meeting at the dialogue table convened by the Ministry of Economic Affairs, the general secretary of the CCOO, Unai Sordo, and that of the UGT, Pepe Álvarez, pointed out that the companies “are passing on the increase in the costs of the energy” and have reminded them that “they cannot only safeguard their profits without distributing them to their workers”, after the failure of the last attempt at collective bargaining.
Also before the meeting, the president of the CEOE, Antonio Garamendi, stated that his organization is not opposed to raising wages, but to indexing them to inflation, since this would cause second-round effects (a spiral of prices and salaries that, according to certain experts, would feed back into inflation) that would make Spain lose competitiveness and companies, productivity.
The truth is that the economic recovery has already slowed down, although numerous economists argue that the priority now is to protect the spending capacity of families, especially the most vulnerable, while tourism can be a differential for our country compared to other comparable eurozone countries.
The Second Vice President and Minister of Labor, Yolanda Díaz, also did not want to miss the opportunity to warm up the meeting and made “a clear call” for a salary increase in response to the impact of inflation.
Díaz, who met this Wednesday in Rome with his Italian counterpart, Andrea Orlando, and with the European Commissioner for Employment and Social Rights, Nicolas Smchmit, supported the salary demands of the Spanish unions and recalled that the European Central Bank (ECB) also He has recommended raising salaries.
For her part, in Palma, the Minister of Industry, Commerce and Tourism, Reyes Maroto, admitted that there is “a slowdown” in economic growth in Spain, but stressed that “in no case” does the Government of Spain foresee a recession.