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ECONOMY

‘Salary or conflict’: Spain braces for massive industrial action over wage increases

Two of Spain's biggest trade unions have warned of "great mobilisations" in the autumn if negotiations aren't opened and wage demands met for millions of workers in the country.

'Salary or conflict': Spain braces for massive industrial action over wage increases
Secretary General of Union General de Trabajadores - UGT (General Union of Workers), Jose Maria Alvarez (4L) and Secretary General of Comisiones Obreras - CCOO (Workers' Commissions), Unai Sordo (3L) demonstrate against rising prices in March 2022. Photo: Pierre-Philippe MARCOU/ AFP

On Wednesday two of Spain’s biggest national trade unions, the CCOO and UGT, demonstrated in major cities across the country and demanded new collective agreements that guarantee the purchasing power of wages and the inclusion of pay guarantees amid skyrocketing inflation rising the prices of everything from fuel bills to olive oil.

Both unions alluded to “great mobilisations” if the situation is not resolved, and Wednesday’s demonstrations were part of a broader ‘salario o conflicto’ union campaign to win wage hikes.

In Madrid rallies were held outside the Spanish Confederation of Business Organizations (CEOE) and the Business Confederation of Madrid (CEIM).

Unions are calling for a 3.5 percent increase, 2.5 percent by 2023 and 2 percent by 2024, including a salary review clause to allow unions to reassess wage demands as the economic situation develops.

The proposed industrial action comes amid broader walkouts and would not be the first in Spain this year, with sectors across the economy buckling under the pressure of increased fuel and goods prices. Spanish cabin crew on walked out over pay and conditions last month, cancelling and delayed hundreds of flights, and earlier in the year truck drivers ended a weeks long strike over fuel prices that left supermarket shelves empty in parts of southern Spain.

The general secretary of CC.OO, Unai Sordo, has pointed to the autumn as a period of potential industrial mobilisation if CEOE employers do not agree to a new wage agreement that guarantees the purchasing power of their workers.

“Let the employers make no mistake…trade union organizations have to mobilise the workers in blocked agreements so that the streets fill up, so that factories and workplaces stop, and we can break this barrier that prevents us from being able to maintain wages,” Sordo said during the rally.

READ ALSO: Spain’s summer strike calendar: The days you might want to avoid flying

Both CC.OO. and UGT have long been calling for salary hikes to deal with the effects of inflation, which in June reached 10.2 percent with the underlying rate at 5.5 percent – the highest since 1993.

Leader of the UGT, Pepe Álvarez, believes wages increases need to come as part of broader “offensive and courageous fiscal measures,” from the government, including addressing corporation tax for energy companies, because many have passed on increased prices to the consumer so as not to reduce their margins while accumulating “billions of surpluses.”

Civil servants

But it’s not just Spain’s general unions demanding better wages. Civil servants are also demanding a bigger increase than the 2 percent wage offered to them in the 2022 budget, again mainly due to a loss of purchasing power within the current economic climate.

Civil servant representatives have also threatened a ‘hot autumn’ of action if negotiations do not begin quickly.

The unions consider the 2 percent increase agreed earlier this year to be insufficient, and are instead demanding a salary increase of at least 4.5 percent with retroactive effect, 3.5 percent in 2023, and a clause to review wages against the CPI, Spain’s consumer price index.

The Independent Trade Union and Civil Servants’ Central (CSIF) claims the proposed 2 percent increase is insufficient not only due to spiralling inflation, but because civil servants have, they say, experienced a 20 percent fall in purchasing power since 2010.

Political response

Spain’s Second Vice President and Minister of Labour, Yolanda Díaz, has supported union demands for wage increases and as workers demonstrated on Wednesday made “a clear call” for the salary increase in line with the impact of inflation.

“The way out of this crisis as a result of the war in Ukraine cannot be that of Mariano Rajoy or the PP. We can’t get out of this crisis by lowering wages. The impact of 10.2 percent of inflation on Spanish wage income is impossible. I am in favour, like the unions, of raising wages,” Díaz said from Rome on Wednesday.

Her comments come amid speculation about a behind the scenes bust up between the government’s two coalition partners, the PSOE, and junior partner Podemos, about increased defence spending commitments. 

Member comments

  1. And when everyone receives this wage increase, that will do what to the cost of goods? Do people really think this spiral stops when they get a bump in pay? It just accelerates things and drives us to a deep recession and then people will be happy to even have a job. The blind leading the blind

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TAX

Spain to tax the rich to offset inflation relief measures

Spain's left-wing government has said that from 2023 it will slap a temporary tax on the wealthiest 1 percent of the population to help pay for inflation relief measures.

Spain to tax the rich to offset inflation relief measures

Tax Minister María Jesús Montero told La Sexta television channel it is important that “we can finance the aid” put in place to support “the middle class and workers”.

To this end, the government will impose an “exceptional” tax on Spain’s “big fortunes”, she said.

The tax will last for two years and affect “no more than one percent” of the population, Montero said.

“When we talk about rich people, we are talking about millionaires,” she added.

The minister did not provide details on what the tax rate would be or how much it would raise.

The announcement comes just days after Andalusia’s regional government decided to scrap its wealth tax for residents and non-resident homeowners with worldwide assets above €700,000, in a bid to attract higher earners to the southern region.

This has sparked a debate in Spain over whether it is fair for some regions (those governed by the right-wing Popular Party to be exact) to offer better tax conditions than others and then ask for an equal or bigger slice of the pie from the national state budget. 

Montero has accused regions such as Madrid, which has long been the region with the lowest taxes in Spain, of carrying out unfair fiscal competition, what’s referred to in Spain as ‘tax dumping’.

READ MORE: Why you should move to Madrid if you want to pay less tax

Spain’s leftist government in July introduced a draft bill to create a temporary tax on banks and power utilities to fund measures to ease cost-of-living pressures.

Spain is battling a surge in inflation as a result of the fallout from the war in Ukraine and the reopening of the economy after pandemic-related lockdowns.

The annual inflation rate hit 10.4 percent in August. It has remained in double digits since June, a level not seen since the mid-1980s.

The Spanish government has introduced a raft of measures to help people cope with soaring prices, such as free public transport, stipends for students to stay in school and subsidised petrol.

It says the measures amount to €30 billion  ($30 billion), or 2.3 percent of Spain’s gross domestic product.

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