The period of salary adjustments between this year and 2025 are being questioned by the Tenth Round of Collective Bargaining – which involves 660,000 workers – since inflation would be below the salary estimates for the next two years, which would take away the competitiveness of the Uruguay.
This week the retail inflation (measured by the CPI) hit another low since 2005, falling in its annual figure from 4.8% to 4.1%, as reported by the National Statistics Institute (INE)so that inflation in Uruguay It is accompanying the global and regional trend, with a decline in the rates of increase in consumer prices that is observed in all countries.
The salary adjustments agreed during the Accountability Last year they reached an agreement, based on estimates of possible inflation for the future, that the increases they would be 6.7% for this year, 5.8% for 2024; and of equal magnitude for 2025. However, this generated a problem for the period of July of this year and June of 2025 since the analysts’ projections, according to the inflation data confirmed by the INE, estimate that the floor to negotiate salaries would exceed the inflation rate.
On the other hand, last week an executive – during the lunch of the Association of Marketing Managers (ADM) – mentioned to the president of the Central Bank (BCU), Diego Labat, that the salary adjustments proposed by the government as a floor for negotiation are higher than the inflation that analysts project for 2025 – which is 6% – compared to the inflation that is estimated at 5.3%.
However, since Ministries of Economy and Finance (MEF) They assured El Observador that “for the moment” there are no plans to modify the salary negotiation floors for the next two years.
The lack of competitiveness
Days ago the economist José Antonio Licandro published on its website that the MEF should change its inflation projections as soon as possible and return to those made in 2020 since the scenario makes the need for salary guidelines are adjusted downwards.
“If you don’t do it, you are taking unnecessary risks. On the one hand, it continues to weaken the BCU’s messages on inflation matters, now more optimistic, which does not help to strengthen its diminished credibility, particularly observable in terms of convergence of expectations,” stated the economist, who added that, if the guidelines are maintained , “a good opportunity to reduce price inertia” will be reduced.
On the other hand, the economist assured that, if the salary scenario remained the same, the economy would be affected. competitiveness and the employment. “For the same reason, in the private sector increases in real wages that are difficult to be accompanied by productivity would be promoted, which could constitute a brake on employment growth during 2024,” he said.
For his part, he Center for Development Studies (CED) considered that the salary guidelines “were long” – a phrase used to establish that inflation is below the salary guidelines floor for negotiation – and that this situation “should open the possibility of an eventual redefinition or, at least, imposing that they necessarily operate as a roof.”
In that sense, they assured that this would not compromise salary recovery that it was set as an objective and that the modification of the guidelines should be applied in both the private and public sectors. That is why, according to the CED, the redefinition would have to aim to “avoid misalignments between productivity and real wages like those that occurred between 2015 and 2019.”