The Bank of Spain warns that the pension reform can harm employment and salaries

New amendment to the pension reform. This time from an organization of such importance as the Bank of Spain. The supervisor warns the Government that the new rule could have a negative impact on employment, wages and the competitiveness of companies. This is due to the triple increase in contributions that it imposes and that will especially affect workers with higher salaries, according to the analysis published this Wednesday. What’s more, the highest incomes will have an excess contribution ten times higher than that of those who are below the maximum bases, since they are not affected by the increase in the maximum contributions or the tax on the salary that exceeds said amount, although yes, the increase in quotas brought about by the new intergenerational equity mechanism (MEI).

“The increase in social contributions could generate economic changes (for example, a lower employment rate) that would reduce its capacity to generate greater income for Social Security,” explains the organization directed by Pablo Hernández de Cos, assuming that this The reform will penalize job creation due to the higher costs it means for companies, especially the largest ones, which is where this group of high-income workers is concentrated.

In addition, it also considers that salaries may be affected by this increase in contributions, since by entailing more expenses for companies, they will in turn tend to contain the remuneration of their employees so as not to burden all the costs it implies on their margins. The increase in income from the pension reform “could be lower if higher labor costs negatively affect competitiveness, wages or employment,” he reiterates.

But, in addition, the Bank of Spain corrects the numbers prepared by the Minister of Social Security, José Luis Escrivá. Thus, it estimates that this increase in contributions could increase Social Security resources by around 0.6% of GDP in 2030 and 0.9% of GDP in 2050. And that in the best of cases, since it points out that these forecasts are made “ignoring the effects on employment and wages that could arise from the increase in labor costs.”

This means that in his most optimistic forecasts, the supervisor reduces two tenths of GDP the increase in spending that Escrivá foresees with this triple increase in contributions and that he intends to allocate to the increased spending that will be caused by the wave of retirements of the ‘baby boom’ generation. . The Bank of Spain distances itself from the Government’s accounts and aligns itself with other organizations such as Airef and Fedea, which recently warned that Escrivá’s accounts are somewhat inflated and criticized that they represent more expenses than income.

Banking, the most penalized

The Bank of Spain also emphasizes that the pension reform will have an “unequal” impact between workers and companies. Thus, it will hardly harm those who earn below the maximum base, currently located at 53,946 euros gross per year, and will not have a great impact on smaller companies, since they generally pay lower salaries, while it will be the workers with higher incomes and the large companies that are penalized the most. To the point that the progressive increase in the effective rate of social contributions will progressively increase from 2025 to 2050, when it will reach an increase of 1.2 points for the lowest salaries and 11.3 points for the highest incomes. , that is, ten times more.

The study estimates that those affected by this triple contribution will be around 1.3 million workers, 6.8% of the total, who are those who contribute for the maximum base, and draws the profile of this group. This is a man, of upper middle age, university student, employee of a large company and preferably dedicated to banking, consulting, IT or healthcare, so large companies in these sectors will also be the most penalized. for labor reform.

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