We call on governments to support households and on employers to compensate workers...

The post-Covid economic recovery is well under way, even if growth forecasts have recently been reduced because of the war in Ukraine. The recovery is certainly evident in record-levels of chief executives’ pay, bonuses, as well as in the dividends that are being reported! The situation is less optimistic for workers.

Workers rightly expected a pay recovery after two years of wage moderation, but now see their purchasing power eroded by surging inflation, high energy and consumer prices. Employers seem unwilling to meet workers’ demands. Across Europe, living standards are deteriorating, making it very difficult for the most vulnerable to make ends meet.

As reported in industriAll Europe’s Collective Bargaining and Social Policy Committee, trade unions across Europe are very concerned about the massive income squeeze experienced by many workers. They are calling on governments to step in to support households and on employers to support workers during these difficult times:

  • In Austria, trade unions are calling on the government to counter the effects of rising inflation (almost 7%). They demand a price commission composed of the social partners to monitor the situation; the increase of pensions in line with inflation; a social balancing compensation that consists of a 6% pay rise; and direct payments to households.

  • Belgium is one of the last countries in Europe with automatic wage indexation. This protects the purchasing power of workers, but only partially, as indexation does not cover the full inflation. The Belgian unions are mobilising their members and are organising several major manifestations in 2022 to protest against the rising cost of living and to demand an automatic wage indexation.

  • Czechia registered the highest inflation in the EU in March 2022 (12.7 %), as well as the highest energy prices. Trade unions have proposed temporary measures to tackle the price surges of basic commodities to ease the panic spreading in the general population. They are also calling for market regulations and activating short-time working schemes.

  • In France, households are struggling with very high inflation. Vulnerable groups and pensioners are the worst affected, as unemployment benefits and pensions have been decreasing. Trade unions are calling for measures against companies that received public support during the pandemic and are now paying out huge dividends.

  • In Germany, trade unions are adapting their strategies to the current fluctuating situation. In the chemical sector, IGBCE reached a short-term agreement that will expire in seven months, winning a one-off payment of 1400 euro for workers. IG Metall is calling for wage increases in the metal sectors, limiting the cost of energy and the 'socialisation' of key sectors.

  • In Italy, productivity gains are mainly distributed through company-level agreements, but these agreements only cover 30% of the workforce. Company profits are thus not fairly redistributed. Buffers that affect the price of commodities, employment and wages have been put in place to limit the crisis.

  • Romania is the best example of why strong collective bargaining is needed. FSLI Petrol Energie won a 10% wage increase in their company level negotiations. Unfortunately, this cannot be extended to other workers because the Social Dialogue Law limits negotiations.

Isabelle Barthès, industriAll Europe’s Deputy General Secretary, said:

“We are entering unchartered territories. As a society, we are facing a situation not seen in decades, marked by fears of stagflation, persistent supply disruptions, financial market volatility and war in Europe. Workers must not pay the bill while CEOs receive record pay. We call on governments to support households and on employers to compensate workers. Social dialogue and collective bargaining must be strengthened to ensure better redistribution in society.”

Contact: Andrea Husen-Bradley (press and communication), Patricia Velicu (policy adviser)