Wages for essential workers rise heavily above prices in 2023 and thus purchasing power is gained. But Rome wasn’t built in a day, and the purchasing power that the vast majority of workers lost in the last two crises could not be compensated by a good year in terms of salary.
This is also confirmed by a report by Icsa consultancy and Eada business school, published this Wednesday, which analyzes the evolution of wages since 2007. The conclusion of the report is this: The purchasing power of employees is lower today than it was when the brick and financial crisis broke out.. “We present a study that does not bode well,” said David Suárez, managing partner of Icsa’s practice.
The İçsa and Eada report, based on 80,000 salary references collected between July 2022 and July 2023, predicts a 2023 that will be more beneficial for lower-level employees in terms of salaries than for senior employees. It’s an image that resonates with the work of other houses, such as Ceinsa’s recent one.
Specifically, the document presented this Wednesday states: Wages of essential workers increased by 8.8% in 2023 compared to 2022It is the largest increase in the historical series and significantly above estimates from other sources, such as salary per hour actually worked (5%) from INE or payroll data collected in real time by CaixaBank Research (3.6% in the last quarter).
The authors of the analysis explain this strong rise triple combo: a massive increase in the interprofessional minimum wage (SMI) of 8%; Increases agreed upon through collective agreements above the inflation rate of 4.6%; and increasing difficulties for some companies when it comes to finding certain profiles.
Bad times for middle managers
A massive increase for ordinary employees and a more modest increase for managers, about 3.3%. There Eada and the Icsa report justify this with “achievement of targets”. According to the latest data for the first half of 2023 from the Quarterly Balance Sheet Center published by the Bank of Spain, operating profits increased by 17.7% compared to the same period last year.
For whom is 2023 It wasn’t a good year, it was for middle managers.Those who saw their salaries decrease by 3.8% state that the authors of the study attribute this situation to the current uncertainty scenario that companies are experiencing in the short term. “In good times, they are the first to see their salaries increase, and in times of uncertainty, they are the first to see their salaries decrease,” said Eada professor Jordi Assens.
While the position of middle management is not promising for the future, the artificial intelligence further threatens their roleexplores more polarized work structures, with more rank-and-file employees and bosses, and fewer staff in between.
The impact of reducing working hours is unknown
The government and social actors will begin negotiations next Thursday on how to reduce the maximum working day from the current 40 hours per week to 38.5 hours. The second vice president, Yolanda Díaz, has already made it clear that the reduction of working hours must occur without any cuts in salary. So, Hourly wages of employees will increase.
Will this cause companies to offer lower salary increases in the short term? “It’s hard to think about [la reducción de jornada] “This will have a positive impact on trading profits and therefore not a positive impact on salaries,” said the managing partner of İçsa’s practice area.
The government’s goal is to reduce the working day to 38.5 hours in 2024 and In 37.5 hours in 2025. The great qualitative leap in the vast majority of collective agreements will occur in this second stage. In the former, the impact, although significant, will be more modest and this may affect salary negotiations. That is, disagreement over wages may be greater in branches of activity where working time reductions have a greater impact, and negotiations will be less affected in branches of activities where it is less.