Public payroll spending will record the biggest rise in the last decade in the midst of the economic crisis

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Spain will suffer next year the biggest recession in its modern history, with a spectacular rebound in debt and a stoppage in activity that will have a severe impact on the private sector. The Government expects that at least 900,000 workers will be unemployed and that another four million people will suffer a temporary employment regulation (ERTE) file throughout this year. Instead, the public sector will be safe from this economic crisis in terms of wages and jobs. This was stated yesterday by the Minister of Finance and government spokesperson, María Jesús Montero, and this is reflected in the stability program that the Executive sent to the European Commission on Thursday night: spending on public payrolls will rise by 6% ,which represents an increase of more than 8,000 million euros .

It will be the largest increase in the last decade , both in percentage and absolute terms, and will shoot up the total amount earmarked for salaries of officials and public workers beyond 142 billion . Of course, it will be the largest figure in history, although that is something that has become habitual given that it will be the third consecutive year in which it has been produced, and will represent one out of every four euros in total government spending.

" The remuneration of employees increases in 2020 by 6.09%, to 12.7% of GDP ", the document states, " due to the maximum salary increase of 2.3% expected ". In addition, "the salary equalization of the police and Civil Guard with the autonomous police forces" will be carried out, and "the return of extra pay in Catalonia for the amount of 323 million is also included". To all this, we must add "the increase in the recruitment of health personnel from the SNS [National Health System] and the cost of other contracts derived from the Covid-19" such as, for example, "auxiliary, cleaning and disinfection personnel, research and security ", an expense that will fall mainly on communities and municipalities and that the Executive does not encrypt.

But, in any case, the bulk of the increase responds to the noted multi-year salary improvement agreed by the then Minister of Finance and Public Function, Cristóbal Montoro, with the union representatives of the officials. Public salaries already grew 1.75% in 2018, 2.5% last year and this year they will rebound more than 2%, a figure much higher than expected negative inflation . And that's where some voices point out that there is a remarkable margin for action.

“In this context, it does not make sense that the increase in public salaries is higher than the cost of living , freezing wages would already produce an increase in purchasing power. There are nine million workers in the private sector who have already suffered a drop in wages due to being unemployed, in an ERTE, paralysis of their activity ... In solidarity, the salaries of officials should be frozen, "says Alfredo Bonet, secretary general of the Businessmen's Circle and official on leave.

“ And a recovery cannot be faced with a government made up of 22 ministers, either . Ministries have been created by pure political agreement, so that each party [PSOE and Podemos] has its share of power, doubling portfolios and causing a huge increase in senior positions, handpicked advisers, general directorates, drivers, escorts ... Because creating a Ministry is not just about creating a post and the expense of a minister. The country could work perfectly with 12 or 14 Ministries, because it has already been done, ”Bonet says, pointing out one of the aspects for which the Government of Pedro Sánchez and Pablo Iglesias has been criticized: the significant number of portfolios with few powers and the politicization of the Administration.

Precisely for this point, President Sánchez was asked during the appearance that took place yesterday, and made it clear that he does not contemplate the possibility of reducing the size of his Executive as a measure of now and, above all, as an example. " All the ministers know that they have the confidence of their president, " he limited himself to affirming.

For his part, Montero, at the press conference that he offered last Friday with the vice president of Economic Affairs, justified the decision to "maintain wage incomes" by affirming that it is necessary to "stimulate consumption" and "internal demand" . And in a similar line is expressed Javier Andrés, professor at the University of Valencia and one of the leading experts in economic analysis in Spain.

"The current crisis is not like the previous one, the one that started in 2008. We must have a less restrictive approach and the tone in Europe is there. Public debt will grow remarkably, at levels of between 110% and 120% of GDP, but part must be paid with growth. Nominal growth is what reduced debt after the world wars, ”he explains.

“If we are shy in the fight against the recession, we can drag ourselves into that recession for a long time. But if we are determined, we will go out. Italy, for example, has spent over 30 years with debts of more than 100% and in many of those years it has achieved a primary surplus but its growth has been reduced. We have to aspire to dilute the debt, "he continues.

For all this, effectively, it will be essential that the more than three million people who work in the public sector have purchasing capacity and actively participate in the recovery. But even so, adds this author of numerous books and texts along with such relevant firms as Rafael Doménech and Óscar Arce, it will also be necessary " some adjustment of the most important items of spending " and, therefore, in public salaries. The key, again, resides in inflation, and the form, Andrés concludes, would be future increases lower than this variable.

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