Monday, September 20

The minimum wage reopens tensions in the Government and anticipates new shocks on labor reform and pensions

The rise in the minimum interprofessional salary seemed like it was going to inaugurate the new course of the Government this September. After months of differences, the leaders of the formations that make up the Executive, President Pedro Sánchez and Vice President Yolanda Díaz, had agreed to increase the lowest salaries for the final stretch of the year. But the negotiation of the raise has been complicated in recent weeks and has finally brought to light the differences between the two souls of the coalition. The social dialogue thus resumes the course marked by tensions, with employers, but also internally, and with an agenda full of complex negotiations, such as labor reform and pension reform.

The “intergenerational equity mechanism” and other debates on pensions that open in September

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“I am clear, (I show) my willingness to reach an agreement with the unions and it has to be the other part of the Government that speaks,” said the Second Vice President and Minister of Labor, Yolanda Díaz this Monday.

The coalition government was trying to agree to the increase in the minimum wage with the employers and unions, but the employers’ associations closed in on an agreement in this regard. After several days of prudence, the head of United We Can in the Executive pointed out last Friday to the businessmen for their closure to any increase this year. “That is not negotiating,” he ugly to the bosses. This Monday, Yolanda Díaz’s finger has come to point to the socialist part of the Government.

And it is that, before the repeated refusal of the employers, the unions began to get impatient and demand that the Executive take a decision now. Yolanda Díaz has shown this Monday what was sensed by the delay in approving the measure: that there are again differences within the coalition on the minimum wage.

Pact with unions or solo rise?

The Ministry of Labor and Moncloa agreed to an immediate increase in the SMI, but now there are differences on what increase to apply in the absence of a consensus in social dialogue. Vice President Yolanda Díaz has taken a step forward and demonstrated her position, which consists of agreeing an increase only with the unions. That means either a resounding rise by the end of the year or agreeing on the path of increase for 2022.

“Above all, I prioritize the most vulnerable workers, who are that 1.5 million and a half without coverage of a collective agreement”, has defended Yolanda Díaz from Valencia.

From the socialist side of the Government, the economic vice president has been lavishing herself in a multitude of media in recent days and she is the one who is taking the floor on this debate. Last week Nadia Calviño directed some pressure on employers, asking them for “sensitivity” to the most vulnerable. The economic manager also recalled that negotiations such as the ERTE are now being resumed, with which the State is financing with billions of public money companies with problems due to the pandemic. But the businessmen have continued installed in the ‘no’.

Calviño insisted this Monday that the Government will agree to the moderate rise in the SMI at the end of the year because he understands that “now is the time”, given the good data on the recovery of employment in the summer. “I hope that shortly we can launch the formal consultation with the social agents so that the Government can agree on this increase in the SMI for 2021. And we will see how we continue on the path in 2022 and 2023 so that the recovery, “added the economic vice president, assuming that the increase will only affect this year.

The Prime Minister responded briefly on this issue in an interview on TVE, in which he acknowledged that the rise will be agreed without the businessmen, but did not reveal why. Not if at least the increase will be agreed with the unions, which have been open to negotiation.

Reforms of difficult social agreement

The panorama left by the negotiation of the minimum wage raises concerns about what the coalition government may find in other important reforms pending for the coming months. Above all, the labor reform. This has already faced Nadia Calviño and the United We Can partners in the past and also has the express resistance of the employers’ associations, who have already advanced that an agreement in this regard is very difficult.

The dismantling of the PP labor reform of 2012 is part of the coalition agreement, with which the Government partners feel linked, but the determining factor is the small print of the legislative text that is finally approved by the Executive. That is, how is the prevalence of the sectoral agreement over that of the company, the reform of subcontracting to avoid the precariousness of subcontracted workers, the unilateral modification of working conditions …

Yolanda Díaz’s maneuver on Monday on the minimum wage shows her willingness to fight to carry out her commitments, they pointed to from one of the majority unions, but also their capacity and power within the Government. “We sat down with her (Yolanda Díaz) to negotiate, but if later the PSOE decides, which is not at the table …”, they pointed out.

This Wednesday, the Ministry of Labor retakes the table on the labor reform, in which the differences between the social partners will be measured again. The unions intend to present a joint document to accelerate the negotiation, which must conclude at the latest “by the end of October”, they calculate in CCOO. In UGT they are even more optimistic and would close the negotiation in September.

In any case, the labor reform must be reflected in the BOE before December 31, according to the commitment acquired with Brussels within the Recovery and Resilience Plan. It has to include the dismantling of the PP legislation and other measures to solve major problems such as abusive temporality and high structural unemployment.

It is not the only complex negotiation that is resumed this week. This Monday the table on pensions was reopened, in a first meeting that has functioned more as a “first contact” after the first agreement on the matter. The priorities now go through addressing some commitments that hang on this pact, such as the regulation for all scholarship recipients to contribute and defining the intergenerational equity mechanism (MEI), which will replace the PP pension sustainability factor. The Ministry of Social Security has given until November 15 to reach an agreement on the mechanism and, if not, it will legislate it alone.

This instrument of “equity” constitutes one of the most controversial matters in the new dialogue on pensions in social dialogue, with an eye this time more on the unions, which warn that they will not support an indicator with the same logic of cuts of the sustainability factor. In the same sense, the representatives of United We Can expressed themselves in the Toledo Pact commission, which is why this is expected as another point of friction in the coalition. But this MEI will be followed in the coming months by other debates on pensions, which are also complex, such as the removal of the maximum contribution bases and the review of the contribution careers.

Finally, on Thursday the social dialogue begins another key negotiation, although surely less discussed within the Government: the extension of the ERTE beyond September 30. Several members of the Executive have advanced the intention of expanding the ERTEs due to the pandemic until the permanent mechanism in the labor reform is agreed (with a view to 2022). The extension will surely include some adjustment of the conditions, as has happened in each expansion so far and there will be the focus of discussion with the social agents. It remains to be seen if the Government achieves the backing of employers and unions, which it has achieved in all previous extensions.

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