How much do those who negotiate earn how much we earn

In Spain there is a lot of talk lately about salaries for various reasons.

The main one is the devaluation of the purchasing power of the working class due to inflation: it grew by 8.4% in 2022, compared to the 2.78% that wages governed by agreements increased.

This drop in purchasing power was the definitive push for the Government to approve the recent 8% increase in the minimum wage, up to 1,080 gross euros per month.

The business side, led by the president of the CEOE, Antonio Garamendi, whose salary was disclosed last week in the pages of this newspaper, barely participated in the negotiation on this increase: close to 400,000 gross euros per year.

It is a much higher remuneration than that of the rest of the main actors in the social dialogue: the second vice president and Minister of Labor, Yolanda Díaz, earns 84,601 euros gross per year;

the leader of CC OO, Unai Sordo, 55,530;

and that of the UGT, Pepe Álvarez, 48,800.

Garamendi's salary has aroused much criticism in recent days.

One of the most forceful was that of the President of the Government, Pedro Sánchez: “I ask the employer for responsibility.

You cannot be demanding salary sacrifices from those below while there is a feast for those above.

And there are many self-employed workers and entrepreneurs who will understand what I say.

In this country there can be no double yardsticks."

Nor was the Minister of Labor far behind: “I think that in life you have to be consistent.

And surely with a salary of 400,000 euros [Garamendi] will have enough perspective to see that workers have to raise their salaries by large companies, which are having enormous benefits.

I appeal to the CEOE”.

It has also transcended some isolated criticism from the business world.

The president of the Confederation of Employers of Pontevedra (CEP), Jorge Cebreiros, affirmed this Tuesday that he does not find it "sensitive" that the CEOE pays its president that salary and pointed out that this situation can translate "into what is happening", that is, in "attacks" on the business class.

Garamendi defended himself against these comments by the Galician business leader with the following comparison: “Sorry for making an example, but this is like when there is a rape and they say the girl was wearing a miniskirt.

Sorry no.

I do not accept octopus as a pet.

The bosses' president later apologized and admitted that it was "possibly" not the "clearest" example.

Garamendi's salary contrasts with the contributory regime of the 17 main regional employer leaders.

Of these, 13 do not have an assigned salary for their position, as these business associations have explained to EL PAÍS (except those of Cantabria and Castilla-La Mancha, which have not replied to this newspaper but to the EFE agency).

They are businessmen who combine the tasks derived from directing these organizations with their own companies.

Yes, there is a specific remuneration for the president in the Madrid Business Confederation, of 139,956 euros gross per year in 2021 (the employer does not specify the current salary).

He also receives a salary for his position as the president of the Confederation of Businessmen of Andalusia, but this entity prefers not to detail it: "It is a private agreement."

The Canarian Confederation of Businessmen and the Federation of Companies of La Rioja are the only ones, of the 17 consulted, that do not explain to this newspaper whether their leaders are paid or not.

"We prefer not to make statements," they say in the archipelago.

Thus, Garamendi's salary contrasts with the absence of it for most regional employers and multiplies almost three times that of the head of the Madrid association.

In comparison with the union leaders or with the Minister of Labor, the gap is even greater: he multiplies that of Díaz by almost five and by seven that of the heads of the centrals.

In provincial or regional collective bargaining, on the part of the employees there are workers or union members whose salaries are in line with those of their staff mates.

More information

Golden salaries on the boards, armored managers and million-dollar pensions: this is how inequality in companies becomes chronic

Leading the way in inequality

High salaries like that of Garamendi and other senior managers are not a minor issue in Spain, a country characterized by inequality for reasons of income.

The gap between those who earn the most and those who earn the least is greater than in neighboring countries.

"One of the most important social and economic problems in Spain is the high level of inequality in the distribution of income, significantly higher than in most European countries," says Olga Cantó, professor of Fundamentals of Economic Analysis at the University of Alcalá, and Luis Ayala, professor of Economics at UNED, in the report by the La Caixa Foundation

.

Spain is the fifth country with the worst inequality figures of the 27 in the EU.

It only produces better figures than Bulgaria, Lithuania, Latvia and Romania and is far from the less unequal countries, Slovakia and Slovenia, in the lead in equitable distribution of wealth.

“There is a certain consensus that the main reasons that explain this problem are the productive structure —with a lower weight of high-tech branches than in higher-income European countries—, the high level of unemployment, the notable incidence of low-income work low wages and the reduced size of the system of taxes and monetary benefits”, adds the report by Cantó and Ayala.

Manuel Hidalgo, professor of Applied Economics at the Pablo de Olavide University, stresses more reasons: “The main difference is not that we earn less per hour, but a lower labor intensity.

That is to say, in Spain the high rates of temporary employment and part-time employment mean that at the end of the year the remunerations are significantly lower than if we stay at the figure of how much is paid per hour”.

A four-decade trend

Borja Barragué, a professor at UNED and director of the Future Policy Lab study center, believes that salaries "like Garamendi's, and many others of senior managers of large companies" are proof of a prevailing dynamic: "The norm is that the Most of the population has less and less and the other, more and more.

This is what has been happening in the last 40 years.

There was a time when the industry drove the growth of companies, a sector in which power relations are more equal (thanks to the strength of the unions) and there are fewer wage differences.

However, now it is the service sector that determines growth in Western societies.

The fragmentation of these workplaces, with the consequent loss of power of the workforce, the automation of many tasks and relocation are other factors that have worsened salary conditions at the base.

"If artificial intelligence comes to replace even more labor with machines and algorithms, the trend towards inequality will be accentuated," Barragué adds.

Hidalgo, who alludes to similar factors to explain the increase in the wage gap, emphasizes that this same "worrying" dynamic does not only occur in Spain: "We see in many other countries how the retribution of those above increases and there are fewer and fewer for everyone else.

We see this in the paradox of corporate benefits, which generate better remuneration for the CEOs but not for the workers”.

The president of the CEOE, Antonio Garamendi (2d), the president of the Confederation of Small and Medium Enterprises (CEPYME), Gerardo Cueva (2i), the general secretary of UGT, Pepe Álvarez (i), and the general secretary of CCOO, Unai Sordo (d), on February 9 in Malaga. MARISCAL (EFE)

And as the gap widens, says Barragué, the more faith in meritocracy cracks: “The original idea is that meritocracy justifies salaries, which you earn more or less depending on your productive abilities.

However, it is increasingly clear that this is a myth, that those who have such high salaries are not so extraordinary, so productive.

He believes that there is increasing awareness in this regard: “You just have to watch series like

or

, which lift the veil of meritocracy.

The story that we have always tended to think is that an excellent amount is paid because you work a lot, but the passage of time shows us that this is not the case.

That you can work a lot and never agree to it and, furthermore, some get it with hardly any effort”.

"What surprises me is that there is no mobilization"

Hidalgo agrees when pointing out the collective perception.

“What surprises me is that there is no mobilization.

It is true that unions have lost a lot of power in recent years, but I am surprised that they do not react more to the loss of purchasing power.

It is a structural problem that does not only affect Spain: the unions are losing influence everywhere”, he adds.

On the other hand, Barragué believes that the analysis of meritocracy varies if the sphere is public or private: "It is assumed that meritocracy works in private, that if they charge that it is because they generate it and they deserve it, but then they mistrust what public.

The one who earns a lot in the Administration is seen as a jeta ”.

“When salaries are so different in a company or even in society,” he continues, “the message that is transmitted is that only a few create value, those who command and take most of the cake, and those who earn less are replaceable even by machines.

Faced with this clamp, the UNED economist is committed to the intervention of public policies: "Governments must act so that technological change, among other trends, does not generate even more inequality."

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