DIVIDENDS HAVE INCREASED SHARPLY, BUT THERE IS ALMOST NO WAGE GROWTH

In the past few years, the wage norm legislation has put a real brake on wage growth in our country. Wages must not increase by more than 0.4%. ACV and other trade unions have opposed this law. A petition has already been signed almost 100,000 times. We questioned Chris Serroyen, head of the ACV research department, about the how and the why of the strong opposition.

For someone with a decent gross salary and some nice fringe benefits, purchasing power is not their first concern. Moreover, there usually is a way to move forward through individual negotiations. So why is the wage norm legislation a problem?

Serroyen: The wage norm legislation puts a break on all wages. Not just on wages determined by pay scales. Many employees in managerial or executive positions are paid above or outside the scales. But their wage growth is also capped by the wage norm. Their wages also can’t increase by more than 0.4%. Admittedly, compliance with the law is only monitored to a limited extent, which reduces the likelihood of sanctions. Mainly the sectoral CLAs are being monitored. But exceeding the wage norm is also not allowed for wages outside the pay scales. Except for executives working through a management company. They are allowed to invoice what they want.

But there are certainly other reasons why this is such an important issue.

Serroyen: Wage norm legislation is first and foremost a blatant violation of the right to free negotiations. This right is internationally enshrined in a number of treaties. The International Labour Organisation recognises it as one of the fundamental labour standards and even as a human right. So it is no small matter what the Belgian government is doing. It is blatantly violating international agreements. Those treaties provide for exceptions and nuances. A government can exceptionally and temporarily intervene in free wage bargaining in exceptional circumstances. But the strengthening of the 2017 wage norm legislation went much too far. It is a permanent hold and no longer ‘exceptional’. That is why we have filed a complaint with the International Labour Organisation. It would be a serious embarrassment for our country if it were to be internationally reprimanded.

Furthermore, the wage norm legislation is fundamentally unjust and increases inequality. The employees’ share in the national income is getting increasingly smaller. It’s an international tendency that we also see in Belgium. The wage norm legislation makes it impossible to tackle this inequality. Without free collective bargaining, employees can never claim their rightful share. Employers call our wage claims irresponsible in these difficult Covid times, which have now seamlessly flowed into the Ukraine crisis. But the truth is that there are winners and losers even in times of Covid or war. Even with those winners, who made sky-high profits, we cannot claim our share of the proceeds. At the same time, the shareholders are reaping the rewards. Dividends have increased sharply. But there is almost no wage growth.

The rising energy costs are an additional problem. They are compensated only partly by indexation, because motor fuels, with the exception of LPG, are not included in the price index. Even a 0.4% wage growth on top of the index is not enough to compensate for the loss of purchasing power. That is not only disastrous for families, but also for the economy.

If the freedom of negotiation is so important, then why is ACV still in favour of an indicative wage norm?

Serroyen: The indicative wage norm provided the wage debate with an interprofessional orientation. It was an orientation for employers in weaker sectors, or those with a weaker trade union presence, to still allow wages to rise. That’s important. We want to transcend the sectoral corporatism and move forward in solidarity, and include the sectors where it is more difficult. The indicative wage norm was a starting point for negotiations. It acted as a guide, without being restricting.  It was a bit of a restraint in the stronger sectors, but for the weaker sectors, it was an incentive.

Wouldn’t abolishing automatic indexation create more room for free negotiations?

Serroyen: That’s what the employers claim. But it is only true in theory. It would be naïve to think that it will have the same result for everyone. Especially in the weaker sectors. We notice this in the Additional Joint Committee for Blue-Collar Workers. There is no automatic indexation there. Last year, negotiations about indexation took place within the committee. It was eventually set at 2.85% On top of that came the 0.4% wage growth. But together, that yields much less than an indexation mechanism.

The index increases the gross wage. Employers don’t like that. If they want to give something, they want it to be net, with the least amount of taxes and contributions. But those net increases are not taken into account for sickness, unemployment or pensions and, moreover, erode social security even further. We are not in favour of that. We want gross increases.

Does the trade union have enough of an impact to get such an amendment through?

Serroyen: You shouldn’t underestimate our impact. I have noticed that because of our pressure, wage norm legislation has been broken in practice. To a very limited extent, but the 500 euro corona premium will be added to the 0.4% wage margin. According to the latest NSSO figures, more than 1.3 million employees have received that premium. That isn’t nothing.

But we want to achieve more, of course. We are increasing the pressure with our petition against the wage norm legislation. 25,000 signatures were enough to force parliament to start discussing a reform of the legislation. In the meantime we are close to 100,000 signatures. That is a very good result, especially because quite a few barriers were built into the petition. To sign the petition, you had to sign in using your e-ID or itsme. The government parties can hardly ignore the strong result. The topic is important to the people. But we are not under any illusions. The government started with the agreement not to change the basics of the wage norm legislation. And that seems to be a concrete agreement. Yet we will continue to bring this topic up in discussions with politicians. There will be new negotiations at the end of the year about wage growth for the next two years. With the current inflation rate in mind, there is a growing chance that we are headed for a 0.0% wage norm, even in companies that make huge profits. We won’t agree to that. And we are also already focusing our attention on the next government. With pressure from below and international support for more respect for the fundamental right to free negotiations, we want to change the next government’s mind.