Labour

08
aug

If wages in the past six years had followed the main inflation indicator of the European Central Bank, instead of the health index, there could be 160,000 more jobs now, accounting for over € 3.2 billion net purchasing power.   In a recent study, VKW Metena, the economic think tank of the entrepreneurs’ platform of the Christian employers’ organization, proposes an alternative for the current Belgian wage indexation system. The Belgian system of wage indexation is unique in Europe and has been subject to much political and social debate. Wages and social benefits are coupled to the health index, which excludes tobacco, alcohol and motor fuels, but includes home heating oil, gas and electricity. This implies that, for instance, international oscillations in oil prices can push the index to rapid increases. The indexation is also automatic: between 2005 and late 2010, salaries increased automatically by 11.2%, without social negotiations.   Data for the last six years show, however, that Belgium’s international competitiveness has sharply deteriorated when comparing the wage costs with its most important neighbors: The Netherlands, France and Germany. Since international research shows that each percentage point ...