Carlos Bravo (CC.OO.): “With an increase in contributions, there is a transfer of business profits to salaries”

Carlos Bravo (Madrid, 1962), chief negotiator of Workers’ commissions in the questions pensionstraveled to Galicia yesterday to assess the impact of the latest reform, which the union estimates will improve the pay of 300,000 Galician pensioners, most of them women.

— Pension is the only source of income in three out of ten Galician households. How will the reform affect the community?

— In a pension structure like the one in Galicia, where the weight of minimum and non-contributory pensions is above average, this has a special impact. A double measure is taken for minimums. On the one hand, between now and 2027 they will grow in real terms, between 4 and 14% more than the CPI. And the limit was set that the minimum pensions cannot be below the relative poverty index, which is 75% of the median income, and non-contributory pensions, 75% of that poverty index. If the country’s income rises, these two floors would push up pensions.

— The culprits of the reform say that the principle of contributions is violated: the maximum bases are raised, but less than the maximum pension.

– It’s fake. It is the first time that the increase in the maximum pension has been guaranteed by the CPI, guaranteeing workers higher wages than they have ever had. They are forced to pay more, but the maximum pension will be revalued with inflation, when in the past there were years in which it was frozen or grew less than others. Now it won’t be like that anymore.

—In the highest salaries, there is an additional contribution that does not give the right to a pension.

— We would like a complete cut, but the Government did not dare. In any case, the solidarity contribution is not a new invention, it already exists in the active pension, which allows you to collect 50% of your pension while working. In this case, 10% is stated, but contributions that generate benefits that may occur, such as temporary disability or death, do not reach 2%. The rest is a contribution to solidarity and that’s what it’s called. And that same concept, which was normally regulated by the People’s Party, is now applied to the difference between the real salary and the maximum base, with a reduced contribution. It must be taken into account not only that most of the compensation will be borne by the companies, but also that for the worker this solidarity compensation is a deductible expense in the profit and loss account and the marginal rate for these persons is between 45 and 52 percent. . That is, half of that contribution will be returned through income tax. Which companies will quote more? Yes, and therefore there will be a transfer of income from business profit to salary. That is the logic of this deal.

— There is already a veiled warning from the companies: if they are forced to give more, it will affect negotiations on salary increases.

– That is an excuse, which he will surely use. If they do not sign the AENC [Acuerdo para el Empleo y la Negociación Colectiva], and that’s complicated, it’s because they don’t want to take over the revision clauses, even though we offered that they are not related to the CPI, but to the actual state of the companies. Now they use this excuse because they refuse to assume that purchasing power is guaranteed in the business cycle. We must not forget that between 1979 and 1995 social security contributions fell by six percentage points, of which 5.55 were reductions for companies. And what is now increased from MEI is 1%.

— This reform puts all the focus on income, why is there no adjustment of consumption to keep up with the increase in life expectancy, as in France?

— It is not true, we operate on the consumption side through a gradual and flexible retirement system. In Spain in 2005, the average retirement age was 63.4 years, while in 2022 it was 64.8. The measures we are taking have made it possible to delay the effective retirement age by 1.4 years. And in relation to France, the French system does not have much in common with the Spanish one. The retirement age there is also 65-67. They have the option of exiting with 62 and 100 percent, but only if they are between 41 and 43 years old with contributions. Here in 2027 we will be able to retire at 100% at age 65 with 38.5 years of contributions.