The impoverishment process is speeding up. ELA’s proposals to face up to this crisis
On the 13th of September, ELA presented its analysis of the socio-economic situation and its General Secretary reported that ELA is going to defend the control over prices, the increase in taxes on profits and capital and the increase in salaries at least at the same rate as the CPI to face up to the impoverishment of the working class that is being promoted by employers with the support of the Basque and Navarra Governments. Lakuntza made these statements based on the data from the document presented by Mikel Noval (Head of ELA’s Research Bureau), alongside the specific proposals that the Head of Social Action, Leire Gallego pointed out.
Salary devaluation
Mikel Noval affirmed that the impoverishment process of the majority of the population is speeding up, as is shown by the document presented. While the salaries, pensions and social benefits are losing spending power, the companies are increasing their profits, particularly the large companies, as is shown with the data from the Ibex 35. “In 2021, these companies beat all the records, with profits of over 60,000 million euros, 64% more than the average of the past five years, without taking into account the year of the pandemic. And if this were not enough, in the first half of 2022, they have improved their profits by almost 8%.”
Faced with this reality, Mitxel Lakuntza recalled that they are even talking about ‘extraordinary ordinary profits’, regularising these profits. All of this with Governmental collaboration: “The only steps adopted by the Basque and Navarra governments are ones that benefit the companies’ interests, not those of the working class.”
Accordingly, he affirmed employers are only interested in a drop in wages. Taking into account current inflation, the General Secretary stated that employers are seeking to decrease the working class’ spending power by 7%. “Because on average in all the sectors where we are negotiating, they are proposing increases of just 3%.” In addition, with almost 60% of the agreements to be renewed, “it is sufficient for employers to block the negotiations of the agreements for this devaluation to come into force.”
Likewise, the General Secretary recalled that the income pact proposed by the Lehendakari (President of the Basque Government) Urkullu is an agreement that seeks to protect business profits at the expense of a drop in salaries and he assured that “there is a strategy shared” by the Basque Government and the employers to devalue salaries. He recalled that in the same line as private employers, the Basque Government had applied a salary increase for his public employees of 2%, which is way below the CPI.
For his part, Noval emphasised that high inflation is a structural element and it is not due to the Ukraine war. “Companies are passing on the increases in costs to the prices; therefore the CPI on energy, on food and on all products is shooting up. Additionally, the rise in interest rates is going to mean a new twist of the screw in the impoverishment policy, but for the banks it is going to mean an important rise in profits.” Regarding the next few months, Noval recalled that “the situation is not going to get better than it is now, either regarding inflation or the interest rates, which are going to carry on rising.”
ELA’s proposals
In view of this situation, Leire Gallego indicated that ELA demands steps to reverse the impoverishment process and steps aimed at changing the economic and social model from the roots upwards. Amongst these proposals, she underscores guaranteeing the spending power of salaries and pensions. “The collective bargaining agreements must guarantee wage rises to at least the equivalent of the CPI of the previous year, as is happening in sectors such as the Metal sector in Guipuzcoa, the Construction sector or the accommodation sector in the same region.”
Gallego made the case for a substantial change in the public policies of the ACBC, in order to, amongst other steps, “immediately reverse the cut backs of between 250 and 300 euros a month that are currently being applied to the social benefits, cap electricity, gas or fuel prices, establish the right to energy as a universal right at a social price, permanently reduce the price of public transport or a tax reform to impose a minimum effective rate of 25% on the year’s profits, without any exceptions.”