Spain’s great wage freeze reaches collective bargaining accords

Purchasing power on the slide for Spanish workers as even those with union protection join devaluation tendency

For two years now, Spanish workers have been losing purchasing power through salary devaluation. Even collective bargaining agreements reflect the process: a growing number of them accept that wages are not going to rise, and in some cases that they will even fall.

According to Labor Ministry figures, out of 4.2 million employees covered by agreements that were registered to October, 1.27 million of them have accepted a 0-percent wage variation. Another 13,142 people said yes to an agreement that reduces their salaries over the coming years, with an average contraction of 3.3 percent. Overall, workers who accept a wage freeze or reduction already represent over 30 percent of people protected by a collective bargaining agreement.

If you add it all up, wage growth is flat or even negative”

Collective bargaining gained some traction again in the last three months, but the pace is still a lot slower than in previous years.

“There are millions of people who are losing that protection,” said Ignacio Fernández Toxo, secretary general of the CCOO union.

Apart from high unemployment of around 29 percent of the workforce, most observers agree that the conservative Popular Party government's labor reform has also played a role in cutting salaries.

Meanwhile, the vast majority of employees under collective bargaining agreements registered this year will have salary increases of less than one percent. The average increase, according to the Labor Ministry, has barely changed in the last three months: in October it was 0.55 percent, a one hundredth of a point less than September.

There are other statistics that reflect the wage devaluation more clearly: pay per employee, calculated from national accounting, has been dropping for nearly two years. And these bargaining agreements reflect neither the wage freeze for civil servants nor the loss of income for self-employed workers.

“If you add it all up, wage growth is flat or even negative,” the president of the CEOE employers’ association, Juan Rosell, said last month.


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