Wages
Business 13/07/2022

Wage rises in construction three times higher than in banking

Deadlock between unions and employers at state level leaves collective bargaining in sectors and companies at a standstill

3 min
Terraces in Plaza Santo Miquel in Barcelona

MADRIDInflation is rising, but wages less so. This is the conclusion drawn from the Collective Bargaining Agreements Statistics published every month by the Ministry of Labour. Last week the main unions, CCOO and UGT, warned of imminent conflict in view of workers' loss of purchasing power . The truth is that wage revisions agreed through agreements have averaged 2.45% up to June, slightly above the revision recorded up to May (2.42%), but well below the general inflation rate general inflation in the sixth month of the year (10.2%), as well as the underlying inflation rate (5.5%).

This increase of almost 2.5% comes out of the average of all collective bargaining agreements registered up to June and which have economic effects in 2022: 2,314 agreements affecting just over 6.17 million workers and half a thousand companies, according to data from the Ministry of Labour. Of these, only 344 have been signed this year. The rest, i.e. 1,790 collective bargaining agreements, had been signed prior to 2022 (most are signed for three years). Moreover, of the 6.17 million workers affected, 4 million have experienced a wage increase below 2%.

The rate of agreements signed since the beginning of the year, however, has not yet recovered pre-pandemic levels. As of June 2019, companies and workers signed 419 agreements. This situation is a symptom of clashes between unions and employers, but also of skyrocketing inflation. In April, the rise in prices led CCOO, UGT and the main business association, CEOE, to break off negotiations for a new Agreement for Employment and Collective Bargaining (AENC), which expired in 2020 (the current agreement includes a 2% wage increase). The Spanish government is now pursuing an income pact to contain inflation and spread the damage, a reform which for the time being has been postponed until after the summer.

Services, at the tail end of wage increases

All this, however, has led to a disparity of agreements between different sectors and companies. The AENC functions as a sort of reference guide for the negotiation of agreements and, therefore, wage increases in different companies and workers. This has led to bigger variation between sectors: wage revisions agreed in collective bargaining in the hotel and catering or banking sectors are very different to revisions negotiated in construction, culture or transport and logistics. By major sectors, the services sector is the one with the lowest increase (2.16%) and, at the same time, the one that affects the most workers. It is followed by the agricultural sector with a wage increase of 2.33%, industry (3.10%) and construction (3.15%).

However, if the magnifying glass is placed on activities, the hotel and catering and banking sectors are the worst off. In the case of financial and insurance sector, the collective bargaining agreements in force up to June include a wage increase of 1.08%, affecting almost 300,000 employees. This is followed by the hotel and catering sector, with a 1.13% revision affecting half a million employees. On the other hand, the agreements in force affecting artistic activities, i.e. culture, include a wage increase of 3.66% (affecting 96,000 workers). This is the highest revision, followed by transport (3.29%), activities related to water supply (3.21%) and construction.

No wage guarantee clauses

Moreover, according to data from the Ministry of Labour, most of the agreements registered up until June do not include any wage guarantee clause, i.e., no ex-post revision of the salary to recover purchasing power in the event that the increase is much lower than inflation. Specifically, of all the agreements accounted for, only 14.6% (339) contained this clause, and not all of them with retroactive effect. It should be noted that only 9% of all employees are affected by a change in the collective bargaining agreement. In fact, negotiations between unions and employers at state level broke down precisely for this reason. For the former it was a red line, while the latter do not even want to hear about it.

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