This week back to school is also the week of start of the economic course for many companies and workers. Before the summer, experts already warned that the return after the summer break would be tough. The rise in the price of gas has forced some large industries to stop part of their installations that work with this energy, for not being able to bear the costs. On the other hand, with current double-digit inflation, unions maintain the need to raise salaries to avoid further impoverishment of workers.
“We have too many open fronts that predict a very complicated autumn“, assured María Jesús Lorente, president of Cepyme Aragón, because the increase in energy prices continues, increases in interest rates are announced, the ICO credits of the pandemic must be returned, among others. The Russian invasion of Ukraine has destabilized Europe geopolitically and now also threatens to do so economically, in the face of fear of opening a period of recession.
“The scenario is not the most positive, but so far employment is behaving in a normal way. We will have to see how it evolves”, added Daniel Alastuey, general secretary of UGT-Aragón, referring to the unemployment data in August known on Friday. Unemployment rose in Spain in a month that traditionally is the end of summer contracts and in Aragon it fell slightly.”If with these turbulences employment continues to grow, it can be said that there is a certain economic strength”, he considered, although cautious due to the uncertainty of this last year.
“There is a certain return to normality. Since 2020 the data did not meet the seasonality of a lifetime in which we know that there are months in which unemployment is falling and others in which unemployment rises”, as would be the case in August, added Manuel Pina, general secretary CCOO Aragon.
“With the rise in electricity, gas, fuel, and if we add that on January 1, 2023 they will have to pay more self-employment fees, people do not invest, do not hire, and are uncertain” (Mayte Mazuelas, ATA Aragon)
However, the vision from organizations such as the self-employed and professionals TO Aragon it is totally contrary. “There has been a loss of 470 freelancers a day in Spain and in Aragon they were already lost in June and July,” said its president, Mayte Mazuelas. Some professionals would not have raised the blinds again when they returned from vacation. “With the rise in electricity, gas, fuel and if we add that on January 1, 2023 they will have to pay more self-employed quota, people do not invest, do not contract and are uncertain”has warned.
Around the wages
“The main problem that workers have is purchasing power”, Alastuey stressed. Hence, it maintains the need to negotiate salary increases to avoid the impoverishment caused by inflation at 10.4% in August in Spain. “At the moment we are not fighting to raise wages, but rather it is about maintaining purchasing power,” added Pina.
Both agree that permanent contracts have increased after the latest labor reform, but it is not enough. “A job apart from being stable is only of quality if it is well paidwith a reasonable salary that allows them to meet the most basic needs with guarantees and have expectations for the future”, he defined.
Alastuey has aimed to negotiate “reasonable raises” with review clauses to prevent the price rise from causing “a fall in consumption that supposes a greater probability that there will be a retraction in consumption”. He has asked the employers to “think again” and sit down again to negotiate the rise in the minimum wage. “If employers are raising prices, this has to be reflected in collective bargaining”Pina added.
“Right now we are not fighting to raise wages, but rather we are trying to maintain purchasing power” (Manuel Pina, CC. OO. Aragón)
However, Lorente has recalled that the impact of inflation is also suffered by companies. “The same thing happens to us as to the domestic economy, which goes to the market and sees that no product has dropped. For us, all the raw material has the same price as in February or March when we could not find material,” he indicated. “Many companies tell us that they are working at a loss”, has assured. Mazuelas has agreed on this, adding that “this is not the time for a salary increase. 80% of the self-employed and entrepreneurs in Aragon have not recovered from the crisis.”
The president of Cepyme fears that the current situation of rising costs, inflation and interest rates will end up suffocating many SMEs. “There will be countless self-employed workers and micro-SMEs who, between the increase in energy costs, raw materials, interest rates, financial pressure and now the rise in the minimum wage, will reach the end of the month and say ‘I can’t do anything else’ . Many companies are telling us that will be forced to close“, he assured.
However, Alastuey has trusted that the measures that the Government is taking to soften the negative consequences on companies. “The Government is taking measures such as lowering VAT on gas“, he pointed out about the latest announcement to try to lower energy costs, which from some business sectors has been considered insufficient.
“For 95% of the Aragonese business fabric, it is unfeasible to raise salaries” (María Jesús Lorente, Cepyme Aragón)
“A large company has a cushion and tools to make this closure temporary, but when we approach an SME and a self-employed person, this temporary closure ends up being permanent because they cannot assume it,” he said, about the effect on suppliers if they start to produce stoppages in large companies with cogeneration plants due to the rise in gas.
The rise in the minimum professional salary of 1,000 euros per current month, which the Government has put on the table, believes that it is not possible at this time. “For 95% of the Aragonese business fabric it is unfeasible to raise salaries”, has assured. “It would do a lot of damage,” she said. Instead of a general rise, she proposes that negotiations continue by sectors “that know how far they can go.” Hence, he prefers to leave “collective bargaining to take its course.” An option that Mazuelas also supports, who has asked for “respect and social dialogue” since “If we all do our part, we can all reach an agreement”. The president of ATA has stressed that “this is not the time for a salary increase. 80% of the self-employed and businessmen of Aragon have not recovered.”
The burden of ICO credits from the pandemic
Another open front in companies is the debt contracted during the pandemic with ICO credits, granted at low interest, but now have to repay. “It has not given time to recover, for the economy to flow again since the pandemic. The people who have endured have had to use savings and financial lung to be able to continue and it is not good to go into debt if you see that you are not going to sell”, has indicated the president of ATA.
For his part, Lorente fears that there are companies that cannot return them now, unless they manage to renegotiate them with the bank or the Government approves some more extension. Y measures to reduce the fiscal burden in taxes such as income, Hydrocarbons or documented legal acts. “Neither are we saying that we want the tax system to disappear. There is a way to lower certain taxes,” she said, pointing to the extra collection due to price increases.
From UGT the Government is asked to be “agile in the injection of european funds to kick-start the economy” and to approve measures so that “the most vulnerable people do not suffer from energy poverty” this winter due to high energy prices.
Lorente has insisted that “no indicator bodes well for a good end of the year”. That is why he asks the Government for a greater effort to help the group. “Seven out of 10 jobs are generated by an SME in Aragon”he pointed out, to highlight the importance of the sector.
Mazuelas has stressed that the self-employed, SMEs and companies “we are not a problem, on the contrary, we would be the solutionbut since they put obstacles in our way when it comes to selling”, in reference to the central government with regulations such as the recently released one for energy saving. With 27 degrees of temperature in the stores, he believes that sales will suffer. “All these impediments do not encourage neither to undertake nor to continue”, he lamented.
DC. OO. and UGT have considered that emphasizing negative data can only make the situation worse. If there is more fear among consumers, even less will be consumed and companies will have less demand. They warn of the danger of falling into a “self-fulfilling prophecy” by dint of repeating the most negative aspects of the current situation. They maintain their intention to mobilize if the agreement negotiations do not achieve wage increases to combat the loss of purchasing power of the workers. “From experience we know what it costs us to recover rights. We had not recovered those from the previous crisis when covid arrived,” Pina warned. “In each agreement we are going to fight for the maintenance of purchasing power because if we lose 10% in a year it will take years to recover it,” the trade unionist predicted.