Inflation puts pressure on salary reviews and collective bargaining agreements

Note published on August 25, 2021, on El Economista, section Empresas by María del Pilar Martínez
Read original source

High inflation has placed companies in a tight spot in their salary negotiations with union organizations, as the index has been projected at 5.81% – as of July 2021- which could trigger a greater pressure in the agreements.

According to specialists in the sector, this year will present significant pressure; “One of them has been the automotive sector, which has closed agreements at 5%, which entails a higher cost of the collective bargaining agreement itself, and the demands made by the unions have intensified”, said specialist in the matter Óscar de la Vega.

So far in 2021, 2,859 salary reviews have been resolved, involving 966,616 workers, who received average increases of 4.7% in nominal terms and -0.2% in real terms.

According to the June report issued by Conasami [National Commission on Minimum Wages], 516 salary reviews had been presented, involving 95,211 workers, who received average increases of 5.0% in nominal terms and -0.8% in real terms.

It is the third consecutive month since October 2018 that has had decrements in real terms, this as a consequence of the high inflation that has been observed.”