The Government will try in September an income pact that seems impossible

A trade unionist compared it to Silvio Rodríguez's blue unicorn, the one that "lost me yesterday, I left it grazing and it disappeared.

Thomas Osborne
Thomas Osborne
20 August 2022 Saturday 17:49
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The Government will try in September an income pact that seems impossible

A trade unionist compared it to Silvio Rodríguez's blue unicorn, the one that "lost me yesterday, I left it grazing and it disappeared." In this case, the unicorn in question is the income agreement that everyone talks about, many want, but few believe it can be achieved.

The First Vice President and Minister of Economy, Nadia Calviño, is one of those who presses to achieve it. “In September we are going to start the process to promote the social agents to the rent agreement. The Government is going to do its part in terms of raising the SMI, civil servants' salaries and all the measures to control inflation," Calviño declared at the beginning of the month, and last week he insisted in an interview: "I hope that in fall we have an agreement with the social agents to raise the SMI as part of an income pact”.

However, the chances of getting this agreement seem remote. The blue unicorn that Unai Sordo, general secretary of CC.OO., mentioned, seems to be still missing. The differences between the Government, unions and employers on what the income agreement should consist of are multiplying. The Executive excludes pensioners from the sacrifice, which both the CEOE and the Bank of Spain claim to incorporate, the unions ask for fiscal measures to accompany it and the war in Ukraine and inflation continue to add uncertainty to an economic situation that tends to pessimism.

In addition, the negotiation for the Agreement for Employment and Collective Bargaining (AENC) is still stalled, which, if achieved, will set the benchmark for agreements and ensure social peace. Without an agreed AENC, it is difficult to think of an income agreement.

As things are, social peace is not exactly close; on the contrary, a hot autumn is forecast. “Salaries or conflict” was the motto under which 1,500 trade unionists participating in agreement negotiation tables met in Madrid in June. "If there are no salaries, there will be a fight, there will be a conflict...we are going to go to an autumn preceded by the great mobilizations," warned the general secretary of the UGT, Pepe Álvarez, at that time.

There is practically no difference in the percentages of salary increases that are proposed. Both employers and unions move in the environment of an 8% increase in three years, but the great obstacle is the review clauses. They are essential for CC.OO. and UGT, to guarantee that no more purchasing power is lost if inflation goes beyond what is expected, and unacceptable for the CEOE. "We cannot add fuel to the fire and that there are second-round effects on inflation," Antonio Garamendi, president of the CEOE, said at the time.

In addition, another distorting element is added to the already complex situation, such as the elections for the presidency of the CEOE in November, in which Garamendi faces re-election.

Since he gave his approval to the labor reform, the current president has suffered many internal and external pressures to harden his opposition to the government. In this context, it will be much more difficult for him to show flexibility when part of his team is asking for more forcefulness.

Especially when on other important issues, such as the rise in the minimum professional salary (SMI), the Government's position is already committed to reaching 60% of the average salary next year. Precisely, on September 2 the experts who advise the Executive will meet to see if with the updated data this percentage corresponds to the 1,049 euros that they set in the highest range, in their calculations from June last year.