Indexation results in 2.5% pay rise

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From 1 August 2003, all wages, pensions and benefits in Luxembourg have increased by 2.5%, as result of the country's automatic indexation system.

Luxembourg has an automatic indexation system whereby all wages, pensions and benefits are automatically adjusted one month after the average of the cost-of-living index over the previous six months has gone up by 2.5% (LU9911115F). According to the Central Statistical and Economic Research Centre (Service Central de la Statistique et des Études Économiques, Statec), the six-monthly average of consumer prices exceeded the 2.5% figure on 1 July 2003, and all wages, pensions and benefits have therefore gone up by 2.5% from 1 August 2003 (LU0206102N).

This decision was due to be confirmed on 11 September 2003 by the Index Commission (Commission de l'indice). This is a tripartite body that covers all sectors of the Luxembourg economy and meets every three months under the terms of a Grand-Ducal Regulation of 31 December 1998 that charges the Commission with advising and assisting Statec in connection with the consumer prices index.

As a result of the new index-linked pay rise, the statutory monthly minimum wage for unskilled workers aged 18 and above rises to EUR 1,402.96 from 1 August 2003. Workers aged between 17 and 18 receive 90% of this amount (now EUR 1,122.37), and those aged between 15 and 17 receive 75% (now EUR 1,052,22). Skilled workers receive a statutory monthly minimum wage 20% higher than that that for unskilled workers (now EUR 1.683.55) if they perform jobs that require vocational skills normally acquired through education or training leading to an official certificate that is at least at the level of the Technical and Vocational Skills Certificate (Certificat d'aptitude technique et professionnelle, CATP) achieved through technical secondary education.

In the statement of its programme issued on 12 August 1999 (LU9909111N) by the current coalition government, composed of the Social Christian Party (Chrëschtlech Sozial Vollekspartei, CSV) and the Democratic Party (Demokratesch Partei, DP), the Prime Minister said that he would be maintaining the indexation system in respect of pensions, thereby rejecting a recommendation from the Organisation for Economic Cooperation and Development (OECD) that Luxembourg should get rid of automatic pension indexation.