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Precarious salary

In addition to raising the minimum wage, a pact is needed to raise salaries

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Precarious salary

The growth of economy, higher this year at 3%, has not translated into a coherent increase in wages. This is a incontrovertible fact that has immediate consequences (declining social welfare) and in longer term, as it compromises future growth. The evolution of wage income today presents anomalous behaviors; That new contracted in 2016 charge as average 100 euros less monthly than a newly retired (1,230 euros against 1,332 respectively) shows a serious problem in hiring and balance between wages, contributions and benefits for Future retirees. And it gives voice of alarm about serious distortions of labor market in Spain.

The recovery of economy has been achieved by procedure of reducing wages (especially lowest and youngest), precarizaring employment and favouring a very low productivity that generates low quality jobs without value added; But re comes a time when a policy of wage devaluation becomes a risk to recovery itself. The fact that future pensions are less expensive because benefits of lower contributions are lower is neir a solution nor a consolation. At least since year 2015, government, which is so pleased that Spanish economy has returned to path of growth, had to have encouraged a growth-compatible income policy: Wage increases in those companies and markets with Consistent benefits. It is not yet late, but decisions today must be unequivocal and forceful.

Previous Editorials

Enough of excuses (11/12/2017)

Blocked reforms (09/10/2017)

Lose Wages (13/08/2017)

The President of Government announced yesterday that in 2018 re will be a minimum wage rise of 4%. It is a wise decision, because it is a push in right direction--despite those who argue that rise will bring more uncertainty in employment and more precarious recruitment--for two fundamental reasons. The first, because government is issuing message that it is in favour of a wage hike; The second, because during crisis difference between monthly gross average wage and interprofessional minimum wage has only grown: difference was 943 euros in 2007 and in 2016 had risen to 1,052 euros.

However, announced rise falls short in more than One direction. It should be greater, of course, but main problem is that a social pact, politically driven by government, is needed in order to raise wages in agreement in a stable manner over next few years. The executive has resources to push him, if he wishes, even if negotiation is between social agents. At same time, we must act both in way of curbing precariousness of contracts and reform of pension system in depth; Reform that eternalizes in time without results despite unequivocal signs of financial crisis. The Spanish economy needs a new wage policy on an immediate basis; And I needed it two years ago.

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