Business 17/01/2022

Foment's U-turn: employer association now defends wage increases to counteract rising inflation

A month ago it said it was "counterproductive" to do so and called for "moderation"

2 min
The president of Fomento , Josep Sánchez Llibre, in an archive image.

Employer association Foment del Treball has changed its tune regarding wages. If only a month ago the Catalan employers' association defended "moderation" of salaries in the midst of a record rise in inflation, today it has stated that salaries have to rise so that workers do not lose purchasing power. "Not only the minimum wage has to go up, but all wages," said the president of Foment, Josep Sánchez Llibre, in an interview on La 2 - Ràdio 4. Wages "have to be competitive and people have to earn a living," added Llibre.

Llibre defended the need to be "realistic, objective and responsible" and pointed out that "it would be interesting" to reach an agreement between employers and unions to agree on wage increases for the next "two or three years". In Catalonia, prices rose by 6.1% in December and, although the employers' leader did not want to specify how much wages would have to rise, he did defend the need for workers not to lose purchasing power, according to Efe agency.

Llibre has assured that Foment del Treball has always maintained a "social soul". Even so, just a month ago Foment it was concerned about the possibility of wages going up in response to rising inflation. As Salvador Guillermo, Foment's deputy secretary general, explained, this could hinder economic recovery because wage hikes could cause the sharp upturn in inflation not to be transitory but to consolidate. "We would have achieved higher wages, but in the long run also higher prices," he said. "A wage increase in line with the CPI would be counterproductive," he added.

Other Catalan business institutions, such as the Cambra de Comerç, have also called for restraint in wage increases.

Sánchez Llibre's words today are linked to the speech he made when he arrived at the head of Foment, when he defended the sharp rise in the minimum wage that had been proposed at the time: "We can recreate ourselves saying that our economy grows more than the European economy, but it will be useless if wages do not allow people to live in dignity," he said. Or again: "We cannot say that we have come out of the crisis as long as wages do not rise".

Even so, when last year the government raised a new minimum wage increase, Llibre said it was inadequate to do so. "It is not the right time," he defended.

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