Public Sector Employee Salaries to Increase Retroactively by 0.5% Starting 2024
Approximately three million public sector employees are set to receive a salary increase of 0.5%, effective retroactively from January 2024. This adjustment follows the final inflation data release for December, which confirmed the link between inflation rates and salary adjustments. The new increase will be added to a previously approved 2% raise that was established in June 2024, also with retroactive effects for the same year.
The government reached an agreement with labor unions UGT and CC OO in October 2022 regarding future salary increments. This agreement stipulated an additional 1.5% salary increase for 2022, which was on top of an already implemented 2% raise at the start of that year. For 2023, salaries were increased by 2.5%, later enhanced by another 0.5%. A 2% increase was planned for 2024, with the potential for an additional 0.5% if the harmonized Consumer Price Index (CPI) exceeded the fixed salary increments for the years 2022, 2023, and 2024. The recent inflation data confirmed this extra 0.5% adjustment, which was anticipated.
However, this salary increment will not take effect until it is approved by the Cabinet. The Ministry of Public Administration has yet to announce when this increase will be presented to the government.
With the latest salary adjustments, the increase for public sector employees in 2024 will average 2.5%, whereas the average inflation rate is expected to be around 2.8%. This discrepancy indicates a slight decrease in purchasing power by three tenths of a percentage point. Data from CSIF reveals that this trend of diminishing purchasing power has been consistent in recent years. In 2023, inflation rose by 3.5%, while salaries increased by only 3%. In 2022, the average CPI was 8.5%, compared to a 3.5% salary increase. In 2021, inflation was 3.1%, while salaries only grew by 0.9%. In contrast, previous years had seen some gains in purchasing power.
CSIF expressed concern over the ongoing decline in purchasing power, criticizing the government's focus on other issues rather than addressing public sector salary concerns. On the other hand, UGT and CC OO, the unions supporting the agreement, highlighted that the overall salary increase from 2022 to 2024 would be around 10%, and they noted improvements in labor rights, including advancements in public employment, work hours, and early retirement options for public employees.
In comparison, private sector wages experienced a slightly higher increase in 2024. According to data from the Ministry of Labor, private sector salaries grew by an average of 3.1%, surpassing the public sector's increases by six-tenths of a percentage point. It should be noted, however, that wage growth in the private sector is not uniform. Approximately 3.3 million private sector workers have seen their purchasing power decline due to salary increases below 2.5%, while another 3.4 million have maintained their salary levels, and about 3.9 million employees have enjoyed an increase in purchasing power with an average salary increase of 4.1%. Additionally, the pensioners, numbering 9.3 million, benefited from a 3.8% increase in their pensions.
Looking ahead to 2025, the Ministry of Public Administration initiated discussions for a new salary increase on December 19. However, unions have reported that they have not yet been called to these negotiations. Typically, public employees would know their salary adjustments with an approved budget, but the current budget remains extended.
CSIF has stressed the urgent need for negotiations regarding this year's salary increases, as well as for a new salary agreement, the elimination of the recruitment limit, and a new public employment offer for 2025, particularly given the government's struggles to finalize the General State Budget.
