October 30, 2020

The gap between new salaries and new retirement pensions is reduced by half in one year | Economy

The gap between new salaries and new retirement pensions is reduced by half in one year | Economy


NEW EMPLOYMENT AND PENSIONS

In euros

Source: INE and Ministry of Labor, Migration and Social Security.

In the time of boom economic, salaryThe newly hired workers were superior to those who were new to retirement. The crisis changed that, and in 2012 the novice pensioners began to have better rents than the newly hired. The gap arrived in 2016 at 100.03 euros. However, in 2017 that gap was reduced, and in just one year remains at 46.6 euros, half. The reason must be sought both in wage increases (especially the minimum) and in some moderation of higher pensions.

The salaries of the newly hired grew last year. At the worst moment of the crisis, in 2013, the epicenter of the second recession in just five years, the salaries of those who barely had a year in their companies fell to 1,144.85 euros gross per month. Then they began to recover, but in 2016 the comeback was interrupted. And they went down. And hence the gap with new pensions will exceed 100 euros.

Last year, however, salaries rose again. Specifically, the salaries of newly hired workers stood at € 1,271.89 gross per month, according to the statistics of wage deciles of the EPA. This increase in wages also coincided with the first large rise in the minimum wage after a long time frozen or with very low increases: in 2017 it increased by 8% at a stroke, to 735 euros per month in 14 payments.

AVERAGE PENSION OF THE NEW RETIRED

Euros per month

Source: INE and Ministry of Labor, Migration and Social Security.

Moderate pensions

The rise in the salaries of the newcomers is the main explanation for the reduction of the smaller gap between the new salaries and the new retirement pensions, in favor of the latter. But there is another: the pensions of those who begin to receive retirement are falling.

If nothing changes in the last two months of the year, 2018 will be closed again with a reduction in the average pension for new retirees. It will be the third consecutive year in which this happens since 2015, when it reached ceiling with 1,342.94 euros. Until then, the new benefits grew year after year, but adjustments have already begun to have effects that contained the latest pension reforms and, above all, have also reached the consequences of the dismissals of workers in their last working life, which they have not returned to work and whose pension has some impact.

Both factors explain that last year new retirees received an average pension of 1,318.47 euros per month and that in the first nine months of 2018 the trend continues, with a benefit of 1,306.84 euros, according to Social Security data.

This situation has coincided with the years of growing deficit in Social Security and, in part, it is explained by this: the lower salaries mean less revenue for Social Security. Now the creation of employment has boosted the collection: until October the contributions of employees grow at a rate of more than 6%, which is also accompanied by a slight increase in salaries. Even so, the improvement in the collection is far from being enough to close the red numbers of the public institute.

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