Price developments reinforce the need to raise wages

From the Unión General de Trabajadores (UGT) in Spain
Economic recovery must also reach households. But price rises are aggravating the loss of purchasing power of wages, pensions and social benefits.

This situation is combined with ongoing high unemployment rates, more and more precarious and low paid jobs and a decline in coverage of unemployment benefits and social protection, with meagre increases in pensions.

All this, together with the wage devaluation that is taking place, has led to a reduction in personal and family income, an increase in poverty levels and an increase in inequality. Our society is poorer and more unequal and the quality of life of most the population has been reduced. The working poor represent 18.1% of the working population.

The current price evolution reaffirms, in the view of the UGT, the need to raise wages, to ensure that workers do not lose more purchasing power and are able to bring home the fruits of that economic growth. The situation calls for urgent action to rescue families and build a growth model that reduces unemployment and generates quality employment, reduces poverty and restores essential economic and labour rights and public services.

Therefore, the UGT believes it essential that the salary negotiation of 2017 takes account of the major losses in purchasing power, as well as the phase of economic growth and the evolution of prices.

Wages must grow above inflation.  They must boost the distribution of income, with wage increases at the aggregate level higher than increases in productivity. And a guarantee clause should be included in the agreements in case inflation at the end of the year is higher than expected.

Therefore, wages should increase in 2017 by between 1.8% and 3%; raising the minimum wage to €800 this year and €1,000 euros in this legislature. The objective is to increase the quality of life of workers through a wage recovery, which will strengthen economic growth, make it more balanced and generate quality employment, to make the productive model more efficient and sustainable, to reduce levels of inequality and poverty, and increase social security provisions.

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