Carlos Solchaga, “super minister” of Industry and Economy during the governments of Felipe González, recently commented to me with admiration and healthy envy about the behavior that the unions have had in the face of inflation. The wage moderation recorded during the years of the progressive coalition government has prevented the so-called “second round effect” from occurring. Nothing to do with his stage in which he had to confront them for industrial reconversion.
The truth is that CC.OO. and UGT during the Pedro Sánchez government have acted as if they were the little sisters of charity. It is true that this moderation has been paid for with subsidies and more union power. The second vice president, Yolanda Díaz, has also not been immune, who has sometimes acted more like a CC.OO leader. than as the Minister of Labor.
But, in any case, all's well that ends well. Spain, with a CPI of 2.6%, is well below the EU average inflation, which stands at 5.3%. Of course, the price that has had to be paid for this type of protectionism has been a sharp increase in Spain's debt, which already rises to around 1.6 billion that future generations will pay.
The consequence of this continued wage moderation caused by the concatenation of three major crises (debt, covid and war in Ukraine) has been a strong loss of purchasing power for workers, especially among the youngest. Salaries are broken and it is necessary to rebuild them. The social elevator has continued to operate, the children have surpassed their parents professionally, but since they were not paid enough they have had to emigrate. The frustration is even greater when many of these professionals have to accept employment far below their professional training. Nor can we forget that large mass of young people without a job or benefit as a result of academic failure, which continues to be scandalous. Unions have to address this new panorama if they want to survive.
It is true that things have begun to improve, salaries have begun to recover purchasing power. Compared to a CPI of 2.6%, wage gains under the agreement have stood at 3.38%. But it is still very little if we take into account that only last year salaries lost more than 5 points – they rose 2.78% with an inflation of 8.4%. If these losses are added to those of other years, Spanish salaries are the ones that have lost the most purchasing power in Europe.
But it has not only been low wages that have hit workers, especially those who earn the least, but also mortgages due to the rise in interest rates. Nor can we forget the sharp rise in food prices, which accounts for a part of their income.
The other side of the coin is business profits, which have grown more than 10% in the last year. Its immediate consequence is the investments and the strong job creation that is being recorded. It is the right path, because we must not forget that the unemployment rate is still double the European average.
But not everything has been investment in employment. Enrichment has also occurred, so the time has come to share the profits. In order not to break salary moderation, this distribution cannot be done only through the salary in hand, we must resort to deferred salary. It is a good time to develop the “Austrian backpack”, pension funds or enrich collective bargaining.