Civil servants and six million employees of private companies also lose purchasing power in 2023

If 2022 was the year of the greatest loss of purchasing power in 40 years for Spanish workers, 2023 will be remembered as the year in which the wound began to heal.. However, this recovery is not being the same for everyone.. A non-negligible part of employees will once again see another hole opened in their pocket. In 2023, the salaries of 2.7 million public employees and around 6 million workers in private companies will grow less than consumer prices.

At the same time, the rest of the incomes that depend on the Government's decisions will keep their purchasing power intact. Pensions, the minimum interprofessional salary (SMI) or the minimum vital income (IMV) have been protected by the revaluations approved in 2022 and 2023.

The group that has lost the most purchasing power this year is public employees. The salary increase approved by the Executive for this group included an increase of 3% for this year. An improvement that is not enough to compensate for an increase in consumer prices that reached 3.8% on average until November 2023. Furthermore, everything indicates that if inflation forecasts for 2024 are met (3.4%, as expected by the European Commission), public employees will lose purchasing power again in 2024 as well.. Next year the agreed increase is a maximum of 2.5%.

Civil servants were already one of the groups hardest hit by inflation last year. Then his salary grew by 3.5%, compared to a price increase of 8.4%. Losses in purchasing power that accumulate to those experienced during the years of the great recession, in which they suffered a 5% drop in their remuneration. However, it is important to remember that public employees tend to have a more comfortable economic position than private employees.. Their average salary is 34% higher than what companies pay, something that is largely explained because civil servants tend to have longer and more regular careers.

Private workers have been able to weather the storm somewhat better. In this case, since there are different statistical sources, it is difficult to specify the evolution of their salaries.. If we take the statistics on collective labor agreements, we see how private salaries increased by 3.5% on average year-on-year until November, somewhat less than inflation.. In the eurozone, the average increase in the third quarter was 4.7%. However, if only the collective agreements signed in 2023 are analyzed – and not the salary increases agreed in other years, but with effect this year – the increase in remuneration reaches 4.15%.

In total, there are 10.56 million workers covered by these collective bargaining agreements.. However, 5.8 million of them have received agreed salary increases of less than 3% this year. In any case, it is worth remembering that the statistics on agreements do not reflect the individual agreements that workers may have reached with their company, although it does give a good image of the general panorama.

However, other statistics, such as the Quarterly Labor Cost Survey (ETCL) or the tax information of large companies, suggest that the increases have been greater.. The ETCL reflected an interannual increase in the salary cost per hour worked of 5.1% in the third quarter of the year. In large companies, the increase in average gross performance is around 4.5% on average in 2023.

At the sector level, the workers who have registered the greatest increases by agreement are those employed in artistic, recreational and entertainment activities (4%), administrative (4%), the agricultural sector (4%), hospitality (4%) and commerce (3.8%). On the opposite side of the spectrum, the real estate sector (2.6%), finance (2.7%) or information and communications (2.7%) stand out.

Shielding pensions, SMI and IMV

Given the strong rise in inflation that has been recorded since mid-2021, most European countries have opted for an income protection policy, which has implied, for example, strong revaluations of public pensions.. In the case of Spain, the Executive approved in 2021 to protect public pensions from increases in consumer prices. Since then, public pensions have retained their purchasing power and are revalued in accordance with the CPI.

Another income that has also maintained its purchasing power in 2023 has been the interprofessional minimum wage, an income that some 2.3 million Spaniards receive, according to CCOO estimates.. The SMI rose 8% in 2023, an increase designed to recover the purchasing power lost in 2022.

To compensate for the rise in consumer prices this year, the Government is already preparing a new increase in the SMI for 2024. Although negotiations are still underway, the Executive, which has the final say on this matter, has guaranteed that the minimum wage will increase by at least 4%.

Finally, the Executive has also protected the purchasing power of the most vulnerable population, those who receive the minimum vital income and non-contributory pensions.. These two incomes, whose amounts are linked, were revalued by 15% in 2023 as part of the anti-crisis support packages. As reported by the new Minister of Inclusion, Social Security and Migration, Elma Saiz, these two incomes will increase by 6.9% in 2024.

Salaries, less purchasing power than in 2003

The concatenation of economic crises in the 23 years of this century have had a dramatic effect on workers. So much so that the purchasing power that employees have in 2023 is lower than what they had in 2003.. Since then, consumer prices have risen by 58%, while salaries negotiated in collective agreements have risen by 55%.