Spain: Social partners still divided over pay rise levels
17 June 2015
Spain
Social partners in Spain have still not concluded the Agreement for Employment and Social Dialogue that should have been renewed by the end of 2014.
Social partners in Spain have still not concluded the Agreement for Employment and Social Dialogue that should have been renewed by the end of 2014.
The main problem delaying conclusion of a new agreement is the pact on salaries. The previous agreement, ‘2012–2014 Agreement for Employment and Social Dialogue’, approved salary increases of 0.5% in 2012, 0.6% in 2013, and 0.6% in 2014 (linked to the growth of the Spanish economy).
However, while employers are still in favour of moderate increases, unions argue that since the Spanish GDP is growing, it is time for workers to have higher rises so that they can recover their lost purchasing power. Several meetings have taken place without any agreement being reached.
At a meeting in January 2015, employers’ representatives wanted to keep pay rises below 1%, at about 0.6%–0.8%. Unions wanted rises of more than 1.3%.
In February 2015, the Confederation of Employers and Industries of Spain (CEOE) declared that increases of around 1.5% would excessively increase labour costs and damage Spanish competitiveness (in Spanish). They proposed increases of up to 0.6% in 2015 (in Spanish) if GDP grows 2% or more; and up to 0.8% if GDP growth is higher in 2016 than in 2015. In contrast, the country’s two dominant union confederations, the Workers’ Commissions (CCOO) and the General Workers' Union (UGT) argued that a significant salary increase would fuel domestic demand, and would send a positive signal about the economic recovery. They initially wanted to link salary increases to the Consumer Price Index but, at the end of February, agreed to link salary increases to GDP. However, they still wanted a higher percentage increase than that proposed by CEOE.
At the beginning of March 2015, CEOE increased their proposed wage increases to 0.9% for 2015, and up to 1.3% in 2016. Unions again argued that if GDP grows, then salaries must also increase (in Spanish). The two sides met again at the end of March, but unions refused to accept any increase below 1% (in Spanish). Therefore, no agreement has yet been reached.