Unions consider wage policy for 2001

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In autumn 2000, Portugal's trade union confederations are drawing up their wage policy for 2001, following a year in which pay increases have fallen behind inflation. The unions have called for tripartite dialogue and refused any policy of wage moderation.

The government is working on its national budget for 2001 during autumn 2000, and the trade unions believe that more sacrifices are in store for workers, since no change in the government's incomes policy looks likely. In 2000, the inflation forecast on which wage increases were based was 2%, but the real rate is likely to be 2.6%. At the same time, interest rates have almost doubled, increasing the level of debt of many people, primarily because of increases in mortgage repayments.

In this context, the trade unions have been defining their wage policy for 2001. The General Workers' Union (União Geral de Trabalhadores, UGT) has requested a tripartite social concertation meeting before the state budget is presented, in order to discuss the issues of inflation and productivity. In 2000, the government's general wage and social policy guidelines and its reference figure for pay increases (based on the inflation rate), as well as civil service pay increases and the increases in the minimum wage and minimum pensions, were set without discussion in the Standing Commission for Social Concertation (Comissão de Concertação Social, CPCS) (PT0001179F).

For UGT, wage bargaining in 2000 was thus conditioned by predictions that were never discussed, resulting in extremely distorted and unfair wage policies. Furthermore, it claims that over the past seven years, the overall increase in workers' remuneration has fallen short of the total increase in productivity by 3.8 percentage points, which means that workers have not been adequately rewarded for productivity gains. UGT is also demanding growth based on domestic consumption rather than exports. Finally, it wants the fall in purchasing power in 2000 to be corrected both through bargaining and tax reform.

The General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) is critical of the economic picture currently presented by the Bank of Portugal (Banco de Portugal), which has suggested wage moderation to curb domestic demand and alleviate foreign debt. CGTP has responded that Portugal is not going through an economic crisis, but problems caused by erroneous policies which favour big business and concentration of capital, and by continued unfairness in the tax system. The inflation rate is not out of control, nor has there been a drop in productivity, says CGTP, which instead claims that there has been manipulation of productivity figures. The government's current development plan and productivity strategy is seen as being inadequate and based on low wages and low skills, as evidenced by the recent increase in immigration.