Workers suffocated by public contracts: "I have colleagues who don't even have enough gas to go to work"

The inflation epidemic that is now in its final stages has left workers' pockets full of holes. The loss of purchasing power has been significant and widespread, but salaries are slowly beginning to see the light. However, there are tens of thousands of workers who are being left behind. These are employees of public contracts, workers on the payroll of private companies that provide services to the public administration.. We are talking about gardeners, cleaning staff, security, telecare…. Services whose conditions are usually very precarious from the start and which are coming out especially badly from this crisis.

The reason? a regulation that limits to the maximum the ability of companies to pass on to the administrations the increases in costs they suffer, especially salaries.. This situation has managed to unite the employers and the unions into a common front against the administration, personified in this case in the Ministry of Finance.. The two parties have called on the Government on several occasions to put an end to this situation.. In fact, the employers' association refused to vote in favor of a new interprofessional minimum wage (SMI) if the problem was not resolved.. And so he did.

The rules of contention are the deindexation law, approved in 2015 and regulated in 2017, and the public contracts law. This law was introduced to prevent public prices from being linked to the CPI, but it also vetoed price reviews that were not predetermined in service contracts, except in exceptional cases.. In other words, if during the time that the public contract is in force the company has to raise salaries because the SMI increases or the workers sign a new agreement with better remuneration, the company cannot pass on this increase in costs in any way. to the administration. Contract law develops these exceptions, which are limited to highly valued situations that rarely occur.

The consequences of this limitation, which has been in force since 2017, have now begun to be felt strongly for two reasons.. The first is the strong and rapid increases in the minimum wage approved since 2018.. The SMI has risen 54% since then, and it affects more and more workers. Companies are required by law to pay their workers more, but the administration does not cover that cost. The employers allege that increases in the SMI can cause losses or even the bankruptcy of companies in certain sectors and territories.. Especially SMEs and the self-employed, who cannot plan from one year to the next what the increase in costs derived from the SMI will be.

The second derivative of the indexation law is that it generates enormous difficulties in negotiating agreements. The tenders tend to be long, they are often closed for periods of more than four years, so the salary increases signed in the new agreements cannot be passed on. If companies want to raise salaries to offset part of the impact of inflation, they have to use their own resources. “There are four years of frozen salary because companies usually go through termination procedures justified in the agreements,” says Raúl Olmos, deputy in the union action secretariat of CCOO.

The result is a perfect cocktail of precariousness that ends up translating into frozen salaries, reductions in staff, hours or lack of replacements when a worker goes on leave to compensate for increases in business costs.. “In the end the company absorbs part of the increase in cost with the profit margin, but for the most part they tend to lay off or reduce hours,” says Olmos.

“When it comes to negotiating, our hands are tied”

This reality is confirmed by the contract workers themselves.. Marcos (pseudonym) works on the street cleaning contract of the Brunete City Council (Madrid). He tells 20 minutes that the salaries they receive are low and the hiring document is quite old, so they have barely seen salary reviews. “Collective negotiations are an ordeal, when it comes to negotiating our hands are tied,” he comments.

Salary increases have been meager in this time. “Last year we had a single non-consolidable payment and in recent years increases that have not reached 2%. In salaries of 15,000 euros it is very little money,” he adds.. “I have colleagues who often did not have gas to go to work. They have had to ask the company for advances,” he adds.. Until recently, wage freezes had barely been noticed. However, since June 2021, consumer prices have risen 13%, four times more than they grew in the previous two and a half years.

“It is not normal that the public service has an agreement to raise the salaries of civil servants, that the salaries of politicians rise every year and that they punish without salary increases the personnel who work in private companies doing public work,” he explains, for For his part, Javier Gómez Ochoa, secretary of Trade Union Action and Collective Negotiation of CCOO del Hábitat in Madrid. “The consequences are strikes, layoffs, conflicts, insecurity, accidents… everything that comes with having a contract in a precarious situation in which you cannot invest because you do not recover that money,” adds Gómez Ochoa in conversation with this newspaper.

“In any town, administration, county council you go to, whether it is hiring the ambulance service, home help services…. “Companies provide increasingly worse services because they are more cut-back and they know that there are no price reviews,” says Moisés Torres, federal secretary of Community Services at UGT Madrid, in conversation with 20minutos.

Treasury refuses to change the law

Within the Government, who has the key to ending the deindexation law is the Ministry of Finance led by the first vice president María Jesús Montero. But the ministry in charge of preparing the country's public accounts has no intention of introducing changes beyond the exception that has already been approved for construction contracts due to the increase in the cost of materials.

The minister's position is clear. “We are not going to make any issue that causes the cost of public services to increase in relation to what we are currently providing.”. Nor does it seem logical that the increases in the interprofessional minimum wage fall on the public accounts that all citizens pay,” he said a little over a month ago in statements to the media.

In addition, it must be taken into account that Spain faces an imminent fiscal adjustment process to clean up its accounts, battered after the great recession, the pandemic crisis and the war in Ukraine.. The Executive has a very limited budget margin to increase spending. The revaluation of pensions, the increase in the salary of civil servants and the extension of anti-crisis aid will take away the scarce spending margin that remains free for 2024. In fact, it cannot be ruled out at all that Spain deviates somewhat above its deficit target for this year.