Tourism industry

Wages of Balearic Islands hospitality workers to rise 17% in next four years

The collective bargaining deal will affect 137,000 people employed in key sector of regional economy

Manuel V. Gómez

Salaries in the Balearic hospitality sector will increase by 17% between 2018 and 2021. The increase directly affects 137,000 workers on the islands, but its message has greater reach: the boom in the tourism industry, a key driver of economic growth and job creation, should also lead to higher salaries. The agreed increase, which we be 5% in the first year, is well above the figure in the previous collective bargaining deal, where the increase agreed upon until August was 1.3%. The new deal also makes it harder to cut labor costs through subcontracting.

A waiter in Palma this Thursday.
A waiter in Palma this Thursday.Tolo Ramón

The debate in the Balearic Islands on whether to raise wages and by how much – thus adding to the economic recovery – was encouraging. And it was based on action, not just theory. Trade unions and employers in the Mediterranean island chain, as well as regional employment authorities, signed the agreement which plumps for improved employment quality in the tourism sector.

Salaries will rise 5% in 2018, 5% in 2019, 3.5% in 2020, and 3.5% in 2021

The highlight of the agreement is the fact that salaries will rise 5% in 2018, 5% in 2019, 3.5% in 2020, and 3.5% in 2021. That is a total of 17% in four years. The basis for calculating the increase will be the salary agreement for this year, which the Balearic government estimated at about €1,350 a month.

The deal, which is an extension of the 2014 agreement, but also makes strides in terms of making it harder for the sector to outsource. In that 2014 deal, subcontractors were forced to ensure that their wages were the same as those specified in the agreement. Now that condition has been extended to cover working hours and breaks. This discourages the hiring of multi-service companies for the purpose of reducing labor costs.

The deal signed Thursday is a great moment for the hospitality sector in the midst of the tourist boom, and comes in the wake of a heated debate in Spain about the negative effects of an industry that makes up some 11% of GDP. Between 2014 and 2017, the wage increase was set at 1.125% per year. Starting next year, this amount will quadruple for cooks, assistants, waiters, housekeeping staff, and receptionists, among others.

The new deal in the Balearics also reflects calls from economy ministry, the Bank of Spain, and national employers’ organization, the CEOE who agree that collective bargaining should take into account each industry’s situation in regards to business profits, job creation, and productivity.

The redistribution of wealth begins in the hotel sector Iago Neguruela, Balearic Employment Minister

“We’ve been saying that GDP figures were good in recent years, and the redistribution of wealth begins in the hotel sector,” said the Balearic employment chief, Iago Neguruela, at the announcement of the agreement.

For employers on the Mediterranean islands, the deal was not easy to strike, according to the president of the Hotel Business Federation of Mallorca, Inmaculada Benito. In fact, representatives from Menorca and Ibiza have not yet signed, although Benito explained that it is likely that they will do so soon. The organization met to review the agreement and approval was not unanimous, although a majority were in favor. Benito highlighted the efforts of business owners in terms of accepting this increase in salaries.

English version by Debora Almeida.

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