The organization warns that workers will lose 4.5 points in purchasing power this year, a cut only surpassed by Greece, and asks governments to raise minimum wages
The rampant escalation of inflation is having a major impact on the pockets of workers, to a greater extent in Spain than in the rest of the world. This is what the Organization for Economic Co-operation and Development (OECD) warns in a report published this Friday, in which it estimates that real wages (that is, excluding the effect of inflation) in Spain will fall twice as much as the average of the most advanced countries and will cause a loss of purchasing power of 4.5% this year. This is “one of the sharpest declines observed in the countries for which data is available – surpassed only by Greece – and a significant reduction in workers’ purchasing power as consumer prices in Spain continue to rise to all-time highs,” the statement said. organization.
The wages of workers under the umbrella of the agreements rose by an average of 2.6% until August, a figure slightly higher than the figure for July (2.56%) and the highest increase in the 21st century – according to the latest collective bargaining data released this Friday by the Department of Labor, but it represents a significant loss of almost eight points in purchasing power as inflation stood at 10.4% in August.
In addition, the OECD predicts that the real value of wages will continue to decline in 2022, while inflation is expected to remain high and generally well above the levels envisaged in the corresponding collective agreements signed for 2022.
The agency denounced that this cost-of-living crisis is “disproportionately” affecting lower-income households, which were already the segment of the population that had fallen farthest behind job recovery after the pandemic and are now forced to greater share of their income than other groups in energy and food.
Therefore, he considers it “essential” to support the real wages of lower-wage workers and asks governments to study formulas to adjust official minimum wages and effectively maintain the purchasing power of low-wage workers. That’s exactly when the debate in Spain is more lively than ever about what the new increase in the minimum wage for 2023 should be, given the unions’ request to raise it to 1,100 euros per month and the unwillingness of employers to introduce a new one. to get up.
“Implementing social transfers, on a temporary, means-tested basis and targeting those most affected by food and energy price increases, would also support the living standards of the most vulnerable,” he argues.
At the same time, it points out that “in the current circumstances it is essential that there is an active debate on wages between governments, workers and companies, as none of them can bear the cost of the price increase on energy and commodities alone. To this end, it calls for a new impetus to collective bargaining, while at the same time rebalancing the bargaining power between employers and employees and allowing employees to negotiate their pay on equal terms, something that could be achieved in Spain if it saw the light of the income pact that the president, Pedro Sánchez, announced in his day, but that doesn’t seem to be thriving.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
