The Fed ensures that wage growth is less than inflation
Fedea denies the existence of “clear indications” that price increases are also being passed on to wages, although he admits that this will happen. “a great danger” As stated in the report “Economic situation and response to the crisis in Ukraine” published this week, in the current situation. Angel de la Fuente, Director of Fedia Studies, noted that if this happens, it could start “spiral of inflation Which will feed on itself and turn the price “step” into a constant inflationary process.
For the moment, de la Fuente doesn’t observe that “this is happening,” though he explained that the available data is “of limited use.” Anticipate this behavior. Among them, he cites the Eurostat index of salary costs per hour worked, which reflects that the growth of salary costs in euros “maintains its moderation in the first half of the year”. However, Fedea specifies that this data may be “distorted” due to the pandemic and the use of temporary employment regulation files (ERTE). Affects the length of the working day and for remuneration of employees, in the case of Spain.
The director of Fedea Studies also looks at the figures for contracts up to September in the case of this report. Acceptable wages Contracts rose by an average of 2.61% through SeptemberSlightly higher than the August figure (2.60%), but less than six points from the last flash CPI, which saw the annual rate fall to 9% in September. Leaving double digits after three months Above 10%, according to data drawn from the Ministry of Labor and Social Economy’s collective bargaining statistics.
De la Fuente notes that wage increases are agreed upon in contracts are registered as “humble”, Although he warns that these data must be interpreted “with caution”, as they reflect figures agreed in multi-year contracts agreed in previous years.
The Foundation for Applied Economics Studies (Fedea) has also raised several questions ‘Star’ tax measure approved Executive Officer of Pedro Sanchez recently. In particular, a banking tax levied on extraordinary profits of energy companies and Tribute to Great Fortunes – Announced The impact of inflation and the crisis on the Spanish economy – are “highly questionable” and have motivated them “a strong ideological charge” And they are motivated by the electoral perspective of the current situation.
Its director, Angel de la Fuente, has emphasized that the executive The focus should be on executing an income agreement that includes to pension. Looking at the medium or long term, he thinks he should approve a deep tax reform and not “a series of patches that mess with the rich or certain regions.”
Furthermore, Fedea warns in its report that bills that set fees on banks and energy companies “Worst Expectations Exceeded” And this may raise demands from a tax point of view which are very bad in the rule of law. The Foundation urges the Executive Board to adapt to European regulation, which prohibits this Levy on some energy companies And it relates to windfall profits and not real income.
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