Related news: Mallorca labour: Price increases more than double pay rises

Figures from the national ministry of employment indicate that the average pay rise in the Balearics in 2022 was 2.6%. Applied to some 45,000 workers, this was less than half the rates of inflation in both November and December - 6.3% and 5.8% respectively.

These rates for the Consumer Price Index (CPI) were down on what they were over the summer, when inflation was in double digits. The pay agreements last year therefore entailed a significant loss of purchasing power.

More agreements are in the pipeline. For the Balearics, the most significant in terms of both number of workers and the attention it receives is for the hospitality industry - some 150,000 workers in the hotel, bar/restaurant and nightlife sectors.

Employers and unions had anticipated that the CPI would come down towards the end of the year. The 5.8% is therefore looked at as a point of reference for pay increases, even though core inflation (excluding energy and food prices) was higher - 6.9%.

Nevertheless, the unions are holding firm in seeking a ten per cent increase this year. For the hospitality industry, general terms of the existing collective bargaining agreement have been extended by two years, but pay is a separate item. This would typically be covered by a four-year settlement, but inflation has meant that unions want a year-by-year approach or two years at the utmost.

Taking account of loss of purchasing power in 2022 and forecasts for inflation in 2023, the unions are looking for more than the December CPI reference rate. The general secretary of the CCOO in the Balearics, Jose Luis Garcia, adds that inflation was already on the rise before the war in Ukraine . "Salary increases should be in double digits, because at the beginning of 2022 we were already in a difficult situation". In December 2021, there was a 6.5% year-on-year CPI rise.

Although employers have stated on various occasions that 10% is too high, the general secretary of the UGT in the Balearics, Lorenzo Navarro, says that employers on the islands differ in their attitudes to those of the national employers confederations. "At least the employers here are willing to sit down and negotiate , and some of them have publicly stated their agreement to pay increases."

There are other factors to take into account. Garcia draws attention to the general rise in the cost of living and of housing in particular in the Balearics. "It is much more expensive to live here in terms of food and clothing. The price of housing is stratospherically higher."

The average gross salary in the Balearics in 2021 was 2,073 euros per month, which was below the national average of 2,086 euros and well below the highest - 2,453 euros in the Basque Country.

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