IndustriAll Europe’s Executive Committee, meeting in Stockholm on 24 and 25 May 2022, took a clear stance on much-needed wage increases and a radical reform of European energy markets. It also put forward demands to cope with the current energy price crisis.
The post-Covid economic recovery is well under way but living standards are deteriorating fast in most European countries. Workers are experiencing a massive income squeeze as energy and consumer prices are booming and inflation is rocketing - a situation that is aggravated by the war in Ukraine and related sanctions. With 20% of European citizens currently at risk of poverty and social exclusion, precariousness is at an alarming level.
In its position ‘Fair wages for a fair recovery’, industriAll Europe calls on policymakers and employers to ensure a fairer redistribution for a recovery for all.
Unions are critical that despite record profits registered by some companies, wages are not expected to grow in most countries. Instead, employers persistently warn against a ‘wage-inflation spiral’ and argue for wage moderation. This ignores the fact that there are no signs of wages driving the current energy price-fuelled inflation. Instead of compensating workers for the profits they produced during the pandemic, companies are paying out record dividends and bonus packages to CEOs! This is particularly deplorable where companies benefited from public support and job retention schemes.
IndustriAll Europe argues that wages should develop in line with inflation, price increases, and productivity gains.
However, the current peak of energy prices cannot be tackled by collectively agreed wage increases alone. In its position on energy prices, industriAll Europe demands urgent measures to shield jobs and workers from soaring prices, as well as longer term measures to build Europe’s energy autonomy on decarbonised, domestic energy sources.
Reaching this objective will require massive investment, an ambitious long-term energy and industrial strategy and a deep reform of the EU energy policy framework which is much too dependent on short-term and market-based mechanisms.
A first step in that direction should be a change in the price-setting mechanism to avoid gas becoming the price setter for electricity.