2023-05-01 22:25:16
The OECD says that in 2022 real wages, discounting the CPI, lost an average of 3.3% in purchasing power. In Spain more, 5.3%. And according to the ‘Financial Times’, from 2020 (pandemic) to 2022, prices rose by 22% in the euro zone and nominal wages by 15%, but beware, real wages fell by 6%.
The drop in real wages generates social unrest And if family consumption is the engine of the economy, how the hell have we gotten out of the crisis and there hasn’t been a social outbreak? Because in many countries, and in Spain, pensions, the salary of many families has been revalued with the CPI. It is a great economic and social stabilizer. And here in recent years there have been a sharp increase in the minimum wage (47%) that affects those with lower incomes. Unai Sordo and Pepe Alvarez recognize this in a good article on the occasion of May 1st.
And the two unionists assure that for 2.7 million (30% of those subject to agreements) the salary increase in 2022 was 5%. Of course, for others it had to be less than 2.8% on average. That wages rise more is therefore convenient. For social justice and because private consumption has been falling for two quarters. In addition, the profit of large companies has risen a lot.
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But not all economic sectors are doing well and the vast majority of Spanish companies are small and are experiencing bad times. In 2022, 26,000 closed, a historical record. That’s why the negotiation between employers and unions will not be easy. UGT and CCOO demand a general and multi-year agreement, but employers – fear of great uncertainty – prefer to negotiate agreement by agreement. Wage increases should not lead to the closure of small businesses already suffering from escalating interest rates.
The priority is to reduce inflation. It has already dropped to 4.1%, but food – the one that most punishes low wages – is at 16%. The economy grows, but wages continue to be devalued. Bad for social balance.
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