Rajoy to link wages with corporate and national productivity

In February of 2010 German chancellor Angela Merkel said that Spain should link wages with the Consumer Price Index (CPI). A year after her statement, the current Prime Minister of Spain, Mariano Rajoy, said that his labor reform is based on a format where "salary advancement is negotiated in line with the progress of Spain's economy and particular corporate situations."

A practice already in place

This would be the only measure that could have a near-term impact on the Spanish economy and, therefore, as fuel for job creation or job stability at the least. To pull it off, the government will need to reform collective bargaining agreements and ensure that labor conditions "are negotiated in way that ensures sustainable employment and competitive job sectors." The changes would be carried out by altering the structure of existing agreements.

Of course, social agents are not happy that the national government is meddling in issues pertaining to collective bargaining, much less in those related to wages. In fact, the government does not have the influence necessary to define how salaries should be negotiated. However, it is true that, at least in practice, productivity is already a factor that influences wages. Joan Rosell, head of the employers' groups, said in December that many of the employers' groups that are members of CEOE have already incorporated into their agreements various clauses that weigh economic data for the country and their companies.