Spain’s PSOE-Podemos government to cut public sector wages and pensions

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Spain’s Socialist Party (PSOE)-Podemos government is imposing massive real wage cuts on millions of civil servants and minimum-wage workers, while also preparing deep cuts in European Union (EU) pensions. It comes as Spanish companies are making record profits and Madrid has increased military spending and arms deliveries to Ukraine, amid the US-NATO war on Russia that threatens to escalate into a war total nuclear.

Podemos party leader Pablo Iglesias speaks as interim Prime Minister Pedro Sanchez looks on after signing an agreement in parliament in Madrid, Spain, Tuesday, Nov. 12, 2019. (AP Photo/Paul White)

The government relies on the Workers’ Commissions (CCOO) linked to Podemos, the social-democratic General Union of Workers (UGT) and the Independent Trade Union and Central of Civil Servants (CSIF) to hijack and repress the class struggle. Unions no longer serve as labor organizations but function as bureaucracies in the service of the capitalist state.

Last week, the Minister of Finance and Civil Service María Jesús Montero announced the reduction of the salaries of 3.5 million civil servants. Specifically, Madrid is offering a 3.5% increase this year; 2.5% in 2023; and 2% in 2024, or 8% over three years.

This year’s inflation rate in Spain is over 10%. Public sector workers have already lost 6% of their real wages. If the PSOE-Podemos plans are implemented, the worst would be yet to come.

If implemented, this plan would mean that civil servants would lose thousands of euros by 2025. This would add to the loss of purchasing power over the past decade, as successive Party governments Right-wing Popular (PP) and PSOE-Podemos forced by EU austerity measures. The CSIF, CCOO and UGT unions estimate the fall in public sector wages between 12 and 20% since 2010.

Since private employers use public sector wages as a benchmark, this agreement will directly impact millions of workers outside the public sector.

On Thursday, at its second meeting with the union leadership, the government revised its initial offer, offering a 9.5% raise over three years. However, this would still mean a massive loss of purchasing power over the next three years.

The second announcement follows a now familiar pattern. First, the government makes an offer, followed by “negotiations” with the unions. In the final act of this step-by-step process, an agreement is reached, with the initial numbers slightly improved. The unions then present it as a victory for the workers, while the PSOE-Podemos claims to have made enormous concessions.

Humberto Muñoz, coordinator of the CCOO civil servants area, said: “We would have liked it to go a little further, but we appreciate that this new proposal represents a step forward from the previous one.”

UGT official Julio La Cuerda said he was “virtually certain” they would accept him. “We have asked the government to make an additional effort to cushion the effects of inflation to the limit of possibilities. There has been a very significant step forward, and it seems to us that it is reasonably realistic.

Francisco Lama, CSIF’s secretary, reacted by saying: “We continue to consider it insufficient.[Inflation] is higher than 10%, so we will ask the government to make an effort to try to reach these figures. We hope that some aspects can still be improved.

The CSIF bureaucracy, which has close ties to the right-wing PP, the neo-fascist Vox party and Spanish fascistic police unions like Jusapol, is trying to capitalize on the growing discontent by criticizing the CCOO and UGT. However, he offered no concrete wage increases and refrained from demanding wages above inflation levels.

On September 24, they organized a demonstration of 70,000 Madrid public sector workers, demanding better wages. Many health care workers participated, alongside police officers.

The PSOE-Podemos government is also planning a massive attack on minimum wage workers. The Labor Ministry, led by Podemos leader Yolanda Díaz, oversees negotiations with unions and the big business association CEOE. The unions are demanding a 3.5% increase this year, to around €1,100 a month, which represents a big loss of purchasing power for 8.8 million minimum wage workers in Spain.

In the private sector, the unions sabotage workers’ struggles and impose wage increases below inflation. In construction, the unions negotiated a 3% wage increase; in metallurgy, it is 2.2% for nearly 940,000 workers; in the chemical industry, 2% for 300,000 workers. In the hotel industry, it averages 3% throughout Spain. For 90,000 workers in the banking sector, the unions have negotiated with the banking association AEB a 2.5% increase over the next three years.

Retirees are also in the crosshairs. To receive the next payouts from EU-funded rescue funds to companies and banks, the PSOE-Podemos government is expected to pass a pensions bill that will increase the number of years taken into account to calculate the pension, currently At 25 years. This will result in a substantial reduction in future pension levels. The reform will also de-index pensions from inflation, meaning the government could make pensioners poorer by raising prices.

All of this is happening as companies make record profits. According to the Bank of Spain, companies passed on their cost increases to prices, making profits 6.7% higher than those obtained before the COVID-19 pandemic, which were already historic records at the time.

This experience of the class struggle underlines the need at all times to build independent organizations, grassroots committees, which will unite all sections of the working class against the trade union apparatus and the PSOE-Podemos government. This is in contrast to the path called by the pseudo-left satellites of Podemos. They insist that workers subordinate themselves to pro-capitalist unions, trying to separate the fight against inflation from the fight against the US-NATO war against Russia which is waging it.

The Spanish Morenoite Workers’ Revolutionary Current (CRT) writes that the workers must “demand from the trade union leaderships a coordinated plan of struggle” for wage increases above inflation “with the immediate convocation of assemblies in the work centers and a general strike as a starting point. ”

In the same way, the section of the Committee for a Workers’ International (CIO) in Spain, Class Struggle, supports the call to demonstrate by the UGT and the CCOO on October 7 and November 3 in Madrid, launched to control and repress the rise of social anger and protect the PSOE-Podemos government from an uncontrolled eruption of class struggle.

It calls on “union delegates and works councils to convene assemblies of workers in each workplace to discuss and vote on participation in the proposed general mobilizations, as well as their own demands on wages and working conditions. They should also coordinate with other companies in the same region and industry to promote unified actions.

It is a losing strategy. The International Committee of the Fourth International calls for the formation of rank-and-file committees in every factory and workplace and for the coordination of struggles across national borders through the creation of the International Alliance of Rank-and-file Committee Workers ( IWA-RFC).

The independent organization of the working class must be linked to the construction of a socialist leadership in the working class, a Socialist Equality Party in Spain. Not a single problem facing working people – the threat of nuclear war, exploitation and inequality, the threat of a fascist dictatorship – cannot be solved within the framework of the capitalist system.

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