After a long wait, the Spanish government has given the green light for a 0.5% pay increase for public employees. This adjustment, which was pending for six months, is the last installment of the salary increases agreed upon with the trade unions for the period 2022-2024. The Council of Ministers approved the measure, thus concluding an important phase of salary negotiations, even if the measure will be implemented outside the General State Budget (PGE).
Backdated Payment Ensures Purchasing Power – Partially
The additional 0.5% translates to approximately 14 euros more per month for the average civil servant’s salary. This completes the total increase of 9.8% agreed with UGT and Comisiones Obreras between 2022 and 2024. The increase will be applied retroactively to January 1, 2024, meaning that the approximately three million beneficiaries will receive the outstanding amount in a single payment in one of the upcoming paychecks, and it will be consolidated into their future salaries.
Pilar Alegría, the Minister’s spokesperson, described this step as “very important” and emphasized that it “fulfills” the agreements reached with the unions. She framed the approval within the context of “the government’s commitment in favor of public services,” aimed at strengthening public employment offers and citizen services.
Despite this adjustment, it should be noted that the remuneration agreement signed in 2022 lagged behind the sharp increase in prices during that period. Compared to private sector salaries, which increased by 12.3% according to the INE’s quarterly labor cost survey, civil servants’ salaries have not kept pace. This means that public sector employees have experienced a significant loss of purchasing power during the years of high inflation.
Unions Demand More: Glimpse into an Uncertain Future
While the two unions that signed the agreement welcomed the increase, they also made it clear that several demands remain open. These include the introduction of partial retirement, the reduction of the working week to 35 hours, and the development of a professional classification system.
With this cycle of salary adjustments concluded, the focus now shifts to negotiating a new collective agreement. The unions aim for a multi-year agreement in this regard. Discussions are still at a very early stage, and the current political instability in Spain makes it very difficult to say if and when a new agreement, which will have significant implications for public finances, can be signed. Six months into the year, public sector employees still have no concrete prospects for a pay increase in 2025.
The financial scenario is anything but favorable. The NATO demand to increase defense spending will require significant commitments in the future, which could impact other policy areas. In addition, the higher costs of financing Spain’s structural deficits due to increased interest rates, well above pre-pandemic levels, are a factor. All of this, coupled with spending pressure related to population aging (pensions, health, and care), leaves little room for additional expenditure.
Nevertheless, UGT and CCOO will meet with Óscar López, the Minister responsible for Public Function, next Thursday to discuss the next steps. Although the unions have not yet concretized their proposal, they all agree that they will demand increases that guarantee purchasing power and even allow them to partially recover some of the ground lost to inflation in recent years.
