Salary: Belgium, blacklisted – Economic Policy
The countries around us do not practice automatic wage indexation, but that does not mean that wages are frozen there.
“We must prevent Belgium from becoming sick in Europe.” The Managing Director of the Federation of Belgian Enterprises, Pieter Timmermans, stepped up to the plate at the start of the year in the face of the strong inflationary surge which, according to the expectations of the Planning Bureau, should lead to a new indexation of salaries at the start of the year. next spring, after that of the beginning of the year. Excellent for the purchasing power of employees but dangerous for the competitiveness of Belgian companies which will see their wage costs increase by 5 to 6% in two years. Employers’ organizations are therefore calling for either a jump in the index, or a profound reform of this automatic mechanism that only Malta, …
“We must prevent Belgium from becoming sick in Europe.” The Managing Director of the Federation of Belgian Enterprises, Pieter Timmermans, stepped up to the plate at the start of the year in the face of the strong inflationary surge which, according to the expectations of the Planning Bureau, should lead to a new indexation of salaries at the start of the year. next spring, after that of the beginning of the year. Excellent for the purchasing power of employees but dangerous for the competitiveness of Belgian companies which will see their wage costs increase by 5 to 6% in two years. The employers’ organizations are therefore calling for a jump in the index to be a profound reform of this automatic mechanism that only Malta, Cyprus and Luxembourg share with our country. Politically, this demand is unlikely to be heard, with the presence of socialist and environmental parties in the federal government. It also seems a bit premature since the Central Council of the Economy (the institution which monitors the evolution of wages in Belgium and in neighboring countries within the framework of the 1996 law on the preservation of competitiveness) will not publish its figures only in February. The countries around us certainly do not practice automatic wage indexation, but that does not mean that wages are frozen there and that inflation does not impact joint negotiations in Germany, the Netherlands and France. This is all the more true in these times of labor shortages when companies need to be attractive to potential workers. A recurring criticism of indexation concerned its linear side: the higher your salary, the more an indexation of 2% will earn you. Is it really the optimal allocation of resources in order to support the purchasing power of households? It is for this reason that the Voka (Flemish employers’ organization) offers socially modulated indexation. We understand the union bench, we undoubtedly understand the reasoning but we fear that such alterations will ultimately lead to a much broader unraveling of automatic indexing. The question of linearity also arises between sectors and it has been exacerbated by the Covid-19 crisis: what is the meaning of considering identical wage increases in the hospitality industry or events, which have been put on hold? forced for long months, or in the pharmaceutical industry which has broken its revenue records? In practice, sectoral negotiations or negotiations by the company however make it possible to derogate from the general rule, to obtain specific adjustments. It may broaden its scope in order to better reflect the realities on the ground, perhaps also taking into account the recruitment difficulties and the lack of qualifications which threaten the effectiveness of the recovery plans. This implies forging upstream a societal consensus around a series of general objectives, as often exists in northern European countries, in particular to prevent the categories least able to negotiate – we are thinking of social benefit recipients. for which indexing is crucial – are not the forgotten ones in history. Forging these consensuses is one of the functions of politics. A somewhat forgotten function, do we want to write, in a world where each party seeks more than ever to please its (supposed) electorate and nothing but him. The now ex-minister Jean-Luc Crucke has just learned the lessons: unfortunately, the time has passed for bridge builders.