Collective bargaining resulted in fewer workers above the minimum wage

Last year’s update of collective agreements resulted in a significant reduction in the number of workers who, with the lowest compensations of the respective salary tables, saw a salary above the legal minimum wage in 2021, namely 665 euros.

That percentage has fallen from 40% in 2020 to 16% in the past year, according to the report on the collective labor arrangement published in 2021 and released Friday by the Directorate-General for Employment and Labor Relations. This is the lowest percentage since 2017.

Indeed, according to the document, there were 104,907 employees in the lower positions of the salary tables updated last year with a fixed salary of more than 665 euros (National Minimum Wage or SMN). Compared to 156,685 in the previous year.

The DGERT report points to the decline, both in the total number of employed and in the percentage of those who updated their salary position, in a reversal of a trend of improvement that had occurred three years ago.

trend reversal

“The trend observed since 2017 was reflected in gross numbers and percentages, generally echoing the global dynamics of collective bargaining in 2021, reflecting the impact of the pandemic on the labor market,” he says.

In 2017, the percentage of the lowest wages updated above the legal minimum was 12%, rising to 22% the following year and 33% in 2019. In 2020 it reached 40%, now falling to the aforementioned 16%.
With the increase in the value of the minimum wage to 665 euros in 2021, more workers therefore remained glued to the legal minimum, even in the context of collective bargaining. But the reality is not the same in all sectors, DGERT shows.

In the trade, transportation, banking and insurance and administrative activities sectors, last year’s table updates resulted in compensation above the minimum for all employees who might be covered.
In agriculture and fisheries the percentage was 39%, lower in the water sector, 35%, and only 25% in the manufacturing sector.

The cut highlighted in the report comes in a year when the government awarded companies compensation for raising the minimum wage, which covered most of the costs with the associated increase in social security contributions, but were more generous in terms of compensation for the minimum wage then for updates to values ​​just above the minimum wage.

In 2022, the aid was maintained, but with equal amounts when the update of lower wages above the minimum wage is made in collective bargaining. For this measure, he included the option that companies took in negotiations with employees throughout 2021.

According to data from DGERT, there were 73 collective agreements that updated tables with the lowest salaries above the minimum wage, representing 35% of the total salary update agreements.

The data in the report also provides a picture of the relationship, by sector, of average wages resulting from collective bargaining agreements with the minimum wage. The financial sector guarantees the largest distances, with an average compensation of 1381 euros, more than double the minimum compensation. Transport and storage follow, with an average conventional fee of 1146 euros and 72.3% above the minimum.

In the other sectors there is more compression. In administrative work, an average of 825 euros is 24% above the minimum wage and in the corporate sector the difference falls to 17.2% compared to an average of 779 euros. The manufacturing industry follows, with an average of 14.9% above the minimum, at 764 euros; construction, with only 10.6% more than the minimum wage (735 euros on average); and human health and social support activities, which pay 10.2% more than the minimum (EUR 733).

The data, indicators of strong compression in the highest employment sectors (trade and manufacturing), nevertheless results from the highest average annual salary update given by collective bargaining in the past decade. The real variation in remuneration in the updated tables was 3.7%.

Maria Caetano is a journalist for Dinheiro Vivo

Author: Maria Caetano

Source: El heraldo

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