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The OECD predicts that Spain will be one of the countries where wages lose the most purchasing power.

The OECD lists Spain as one of the countries where “real wages” have fallen the most, dwarfing the effects of inflation, according to a study published this Friday. Job prospects in 2022. “Real wage growth in Spain fell sharply in 2021 and is expected to continue to decline by 4.4% in 2022,” warns the international organization. The figures are more than double the average for the so-called “club of rich countries” and behind only Greece, with a 6.9% drop, in data available to the organization.

In the face of rising inflation and low wage growth, purchasing power is suffering in many countries. But in some cases, the deterioration is greater. The OECD predicts that Spain will be one of the worst hit countries, followed by Italy, with a 3.1% drop in real wages.

“The strength of the labor market has created labor shortages in the tourism, agriculture, construction and technology sectors. This helped boost nominal wages in 2021, but in the context of accelerating inflation, it was not enough to protect purchasing power,” the OECD analyzes in the case of Spain.

Wages did not rise enough in 2021 and inflation has already started to rise sharply, but the situation worsened in 2022. Prices have risen to levels nearly four decades ago, while negotiated wage increases are four times lower, according to the data. from collective agreements. Until August, the wage increase agreed in the contracts was 2.6%, and the annual index increase reached 10.4% that month.

The 4.4% drop “represents one of the sharpest declines in real wages recorded among countries for which data are available,” warns the OECD.

The study notes that this decline in real wages translates into “a substantial reduction in the purchasing power of workers, especially those earning the inter-occupational minimum wage (SMI), as consumer prices in Spain continue to rise to all-time highs.” .”

Wage fight in Spain

The CCOO and UGT unions are calling for management to sit down again to negotiate a state-level wage deal after talks broke down in May. Trade union centers have accused the chief executive of “blocking” wage increases and are warning of increased conflict and mobilization from the autumn if employers do not change their stance.

In the government, social agents are also encouraged to reach an agreement on salary issues, but in a different way. Calls for negotiations in the socialist zone of the executive branch are common for unions and businessmen, and United We Can vice president Yolanda Diaz has pointed out that employers have left the table and do not want to negotiate. .

Thus, Díaz demanded the renewal of negotiations from the businessmen and expressed his support for the unions in announcing the mobilization.

Emphasis on the prevention of ERTE unemployment

The OECD in its report sent to Spain also emphasized the reduction of unemployment. “The unemployment rate in Spain has fallen from its peak of 16.4% (in September 2020) to 12.6% in July 2022. The current unemployment rate is lower than the pre-crisis rate (13.9% in December 2019),” he collects in his specification. A note about the country.

In addition, the agency emphasizes that “temporary employment adjustment files (ERTEs) have helped limit the increase in unemployment.”

In any case, the OECD recalls that “despite the recovery of the labor market in Spain, unemployment remains structurally high and entry into the labor market is difficult for young people”.

The study also indicates that “the employment market in Spain recovered strongly” last year thanks to the “recovery of the tourism sector and the general need to fill vacant positions as restrictions related to COVID-19 are lifted.”

However, he believes that this positive trend could be affected by the war in Ukraine, rising energy prices and uncertainty, which could weaken “business confidence” and slow “manufacturing and service sectors”.

Source: El Diario





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