Employers had already issued a warning yesterday. The alliance representing self-employed workers and the executives of large employers voiced concerns about the programmatic agreement between PSOE and Sumar. They argued that the plan would negatively affect business activity and, in turn, slow economic growth and job creation in Spain. This Wednesday, the mass consumption sector including supermarkets, clothing chains, and major retailers echoed the same worry through the association AECOC, whose president Javier Campo warned that competitiveness would suffer. He pointed out that it is impossible to compete when productivity is low and labor costs are high.
AECOC, one of the country’s largest business associations and a leading voice for the mass consumption sector, notes that this industry accounts for about a quarter of total consumption and GDP. In their view, a sustained negative impact on the largest firms would ripple through the national economy, affecting growth and employment indirectly.
PSOE and Sumar agree to expand banking and energy taxes and toughen corporate taxes
Following the discussions at the 38th AECOC Large Consumption Congress held in Zaragoza, the association’s president and general manager, José María Bonmatí, highlighted the potential for a gradual reduction of the working week to 35 hours and the continuing debate over the minimum wage. The proposal has sparked debate about productivity and competitiveness in the country.
Campo stressed that a sharp drop in hours worked per employee, in a context of low productivity, could seriously undermine the country’s competitiveness. He recalled an earlier example from France, where a similar 35‑hour policy did not deliver the desired productivity gains and, in his view, created new challenges for large retailers and the broader economy. He warned that such a policy could lead to a pronounced loss of competitiveness across the mass consumption sector and beyond.
He suggested that addressing productivity should begin with expanding the workforce in science and technology fields through vocational training, increasing the average size of companies, reducing housing costs, and improving employability. He cited a statistic that only about half of working-age people are currently employed in skills-relevant roles, underscoring the need for targeted interventions.
Keys to agreement between PSOE and Sumar: From 37.5-hour working days and changes in layoffs to new maternity leaves
Reputation concerns also featured prominently in the discussion. Spain’s productivity has long lagged behind the eurozone average, and there is a belief that forcing labor-intensive sectors to raise pay without corresponding productivity gains could backfire. Bonmatí argued that the discussion should take into account how policies affect the image of companies and entrepreneurs. He warned that certain ideological inputs could place firms in the spotlight in ways that might not reflect their broader realities. He also noted that there are elements within the agreement in which business groups have reservations, including a stronger environmental regulatory framework and higher tax pressures.
Both representatives of the mass consumption sector express concern about price pressures. They argue that if inflation continues to rise, consumer prices could approach a ceiling sooner rather than later. Their inflation outlook for 2024 suggests a general rise of around 3.6 percent, with food inflation showing particular weakness. This context heightens the importance of policies that sustain affordability while promoting productivity and competitiveness across the economy.