Wage freeze for 2.8 million public workers extended into next year

The Finance Ministry on Thursday confirmed to labor union representatives that public sector wages would again be frozen next year as part of the government’s state budget proposals, union sources said Thursday.

Speaking in the Senate on Tuesday, Prime Minister Mariano Rajoy made a strong hint that Spain's 2.8 million public workers will see their salaries remain at a standstill for the fourth year in a row. The Socialist government of Prime Minister José Luis Rodríguez Zapatero cut their wages by five percent in 2010. The public sector workforce was also deprived of its Christmas bonus last year, but Rajoy said the economy had improved sufficiently for that not to be the case again.

The freeze in wages next year will also be applied to regional governments.

Labor unions estimate that public sector workers have lost 20 percent of their purchasing power as part of the government’s austerity drive, which is aimed at reining in the public deficit.

However, the government will relax some of the restrictions on replacing civil servants who retire or leave the public payroll. Currently, a replacement rate of 10 percent was only applicable to members of the security forces and civil servants involved in the fight against tax fraud. This has now been extended to other areas of the public sector, such as health and education.

Rajoy also told the Senate on Tuesday that the government has raised the economic growth forecast on which it would base next year’s state budget, to 0.7 percent from 0.5 percent.