Reducing the wage gap in comparison with neighbouring countries
The chemical industry will continue to support all initiatives aimed at improving the competitiveness of wage costs in our country in comparison with our principal commercial partners. At the same time, we will emphasise reducing charges for work teams. Furthermore, essenscia seeks dramatic reductions in the difference between what employers pay for staff and what the workers actually receive. Also desired by essenscia are strict wage standards and a wage policy better linked to business results.
Context
Even though the chemical industry has comparatively robust strength in capital and relies heavily on export, wage costs constitute a very substantial expense, especially in downstream sectors such as the conversion of plastic materials. Belgian statistical data show that the total wage mass of the chemical sector surpassed 6 billion euros in 2005, with 50% of the added value of the sector and 15% of its sales.
Furthermore, wage costs of the average worker in the Belgian chemical sector surpassed that of his/her German counterpart for the first time ever in 2005, making Belgian costs the highest in the world according to the latest survey conducted in December 2006 by the Bundesarbeitgeberverband Chemie, the German Federation of Workers in the Chemical Sector.
Importance for chemistry and life sciences industries
Close to 70 % of workers in our industry work in teams, of which two thirds are part of night shifts. Belgium surpasses all other countries concerning costs associated with work done by teams. This is why, in addition to the general reducing of charges, the chemical sector has long requested measures for team bonuses. Furthermore, the sector accounts for a significant number of highly qualified workers. essenscia requests that the lowering of wage costs be extended to researchers in order to stimulate innovation. The first positive steps have been made in these two directions but it is important more than ever that these initial actions be followed up to sustain the effort.
Sector’s position
The chemical industry will continue to support through competent authorities initiatives aimed at improving the competitiveness of our country’s wage costs in comparison with our principal commercial partners. essenscia welcomes the recent decision by the Government to reduce charges on work. Nevertheless, the further reducing of charges will be necessary to fully decrease the gap with neighbouring countries in wage costs of team workers.
Recommendations
The re-establishment of competitiveness of wage costs must remain the primary goal of our country’s socio-economic policy. With this in mind, essenscia takes the same position as the Federation of Belgian Enterprises (VBO-FEB), with three specific priorities:
• The employer cost/employee pay differential - the difference between what the employer pays out and what the employee actually receives - must be reduced dramatically to allow businesses to pay net competitive wages to workers comparable to those of neighbouring countries. To achieve this, authorities will have to streamline the organisation of their services to bring their public expenditure in line with the European average.
• Although wage standards have retarded wage growth in our country in recent years, our wage costs remain substantially higher than in countries bordering us. essenscia has long championed strict wage standards to avoid further escalation of wage costs, accompanied by a policy of reducing wage charges to re-establish our competitive position.
• Viewing the cyclical nature of the industry, essenscia seeks a wage policy more linked to business results. This proposed variabilisation could turn out to be a win-win proposition: an employer’s overall wage costs evolve according to his/her profits and financial situation, while the worker participates in the economic growth and profits of the business.
Contacts :
Koen Laenens, klaenens@essenscia.be , tel 02 238 97 94
Igor Magdalenic, imagdalenic@essenscia.be , tel 02 238 98 17