here are all the sectors concerned

Friday 01st November 2024 04:11 PM

The year 2025 will start with good news for many Belgians. In January, their salary will be indexed, an increase estimated at 3.5% for the moment. This is called automatic indexation, which is actually a catch-up for price increases. We will also have to wait until the end of December and the final December price index to know the exact indexation figure. For the moment, this is only an estimate, it is important to clarify this, as Giuseppina Desimone, economist at the FGTB research department, tells us.

The 3.5% indexation is currently only an estimate

Giuseppina DesimoneEconomist at the FGTB

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For whom

Who is affected by this January indexation? Around a million employees whose indexation is annual and takes place in January. These are essentially employees of the joint commission (CP) 200, the “catch-all” CP for employees. But there are also workers in CP 119 (food trade, grocery store employees, for example) and those in CP 220 (food industry). And also hospitality workers (CP 302). All these people are affected by the 3.5% indexation in January.

Another indexing in January

To illustrate this increase, we took three worker profiles. Each of them works full time and receives the average gross monthly salary for their profession. Justine (CP 200) is employed. His gross salary will increase in January from 4,095 euros to 4,238 euros. Remember that these are indeed gross salaries and that the net salary depends in particular on the family situation. Fabien is a cashier (CP 119) in a large grocery store. His gross salary will increase from 3,232 euros to 3,345 euros in January. Finally, Cédric, as a cook (CP 302), will see his salary increase from 2,863 to 2,963 euros gross per month.

Please note that these are fictitious examples and that their average salary is given based on Statbel data.

But in January, there will also be an indexation for CP 121. This is the CP for cleaning and disinfection companies (note, this does not concern household help). These workers benefit from half-yearly indexation, which takes place each year in January and July. For these workers, the January indexation would be 1.17%, according to the estimate provided by M^me Desimone.

Why the most generous savings accounts… aren’t that generous

The indexation for this month of January, if the figure of 3.5% is confirmed, will be significantly higher than that of January 2024. It was then 1.48%. But we remember that the indexation of January 2023 for the CP 200, the 220, the 119, the 302 had been around or exceeded 11%, because of the surge in energy prices in 2022. This surge was passed on to the “consumption basket”. What explains such indexation well above 3% in January when it was only 1.5% in January 2024, at least for the CP 200? Here again, the rise in energy prices is to blame. And particularly the prices of electricity and gas.

Competitiveness

But does all this undermine our businesses and their competitiveness? It seems not. According to a recent report from the Central Economic Council (which brings together employers and unions), the wage handicap compared to neighboring countries is being reduced. This argues for maintaining automatic indexing.

Finally, let us add that the “index commission” meets this Wednesday. We will then know the consumer price index for the month of October. The Planning Bureau will adapt its forecasts next Tuesday, November 5. But the estimates we give you here are close to what the reality will be in January.

Very different indexing systems from one sector to another

By BJ

As for civil servants and recipients of social benefits, the last indexation dates from last spring. In April, indicates the Federal Planning Bureau, “the pivotal index for social benefits and salaries in the public sector was exceeded. (…) Taking into account the monthly forecasts of the health index, the next pivotal index should be reached at the end of January 2025. Consequently, social benefits and salaries in the public service would once again be adapted to the cost of living, in other words increased by 2%, respectively in February 2025 and March 2025.”

Remember that civil service salaries and social benefits always “react” more quickly to exceedances of the pivotal index, which trigger indexation. Whereas for joint commissions like the 200, indexing is only done once a year.

Multiple systems

In reality, several indexing systems coexist. If we take the chemical sector, for example, indexation only takes place when we reach 2%. A scenario which occurred twice in 2024. Employees in this sector therefore benefited from 2% twice, or 4%.

In the oil sector, for workers, indexation is monthly. Concrete example: the hourly wage of an oil worker was 26.64 euros in September, it increases to 26.69 euros in October. These are people who work in refineries, essentially. In the wood sector, indexation is done quarterly. It follows the increase in the price index during these three months.

Progressive automatic indexation beyond 4%

By Didier Swysen

Although very controversial and in the crosshairs of the trainer, Bart De Wever, the automatic indexation of salaries will see its principle maintained by the future Arizona government…

The automatic indexation of salaries is one of the last major taboos in the Belgian economy, our country also being one of the rare ones to apply it. The measure is, of course, beneficial for the purchasing power of workers, but it is seen as an unbearable burden by employers (the Belgian Business Federation has already called for its abolition by 2030). The key is therefore to find a balance between the purchasing power of citizens and the competitiveness of our businesses.

In the latest version of his famous socio-economic super-note, the trainer asks the social partners (bosses and unions) to prepare an opinion by December 31, 2026 on a reform of the law on wages and the system indexing.

And in the meantime? Citizens will continue to benefit from automatic indexation, even if the future government reserves the right to make indexation progressive if it is too high (above 4%). In this case, the percentage increase would not be identical for all employees and we would favor the purchasing power of low and medium salaries.

Align calendars

The government also reserves the right to align indexation schedules, i.e. to align public sector indexations, planned two months after the pivot index is exceeded, with the schedule for the majority of private sector jobs, namely once a year, in January.

Let us recall that there had already been talk of indexing on the net rather than on the gross, an idea which seemed nice (workers keep their purchasing power and employers see the salary cost decrease), but whose execution was veering to the puzzle (significant losses of revenue for the State, calculation difficulties, explosion in the number of tax credits, enormous work for the social secretariats, etc.)