Socio-economic Barometer 2022

Men and women

All references to individuals or roles (e.g. workers) of course relate to both women and men.

The details in this brochure are based on the data available in November 2022.

Barometer 2022

Society adapts in times of war

1. Background: after the pandemic... war

Since the end of the acute coronavirus crisis in late 2021, the pressure on our healthcare system has eased and businesses have slowly been able to reopen. We have regained our freedom and our economy has recovered rapidly, as shown by the 2021 barometer. But since then, we once again find ourselves in crisis mode. Russia’s brutal invasion of Ukraine has sent shockwaves around the world. Not only has a war been started against a sovereign country, but the conflict is also causing economic repercussions for European countries. This war is having a significant impact on households, on the business world and on public finances. It is forcing us to approach energy in a different way and is making the issue of a just transition even more urgent. This barometer attempts to illustrate the impact of this crisis and the responses formulated by the FGTB.

1.1 The price to pay: inflation

The word that keeps cropping up in recent months is “inflation”. Since the summer of 2021, price levels have risen sharply. There are many reasons for the rise in prices in general – and energy prices in particular. The reopening of businesses after lockdown led to a rush on products and services. This increase in demand, combined with supply problems in factories, resulted in an increase in prices. And then Russia invaded Ukraine, causing gas and electricity prices to go through the roof. Added to all this there is also a reason that is often overlooked: according to the European Central Bank, many companies took advantage of the end of the pandemic to raise their prices excessively. This has fuelled inflation.

But the rise in prices is mainly due to higher energy prices. Cutbacks in Russian gas supplies caused by the war in Ukraine are the main reason. In addition, there has been massive speculation on the financial markets. For some months now, energy inflation has been creeping into the production costs of other goods and services. The chart below shows the contribution that each product class has made to overall inflation in the eurozone. Energy remains the main driver of inflation, but food (and the shortage of certain foods) has also made a contribution.

CONTRIBUTION TO OVERALL INFLATION (EUROZONE)

Source : Eurostat (PRC_HICP_CTRB)

Since mid-May 2022, market prices for gas and electricity have reached record highs (see section 4.2 for a more detailed explanation). The rise in energy prices is reflected in the higher annual bills paid by consumers. The Belgian government has chosen not to cap energy prices, as France has done, for example.

Source : CREG, 2022

The government has introduced various measures to help reduce bills. These include a heating bonus of €100, a heating oil bonus of €300, a reduction in VAT to 6% and an extension of the social tariff. The social tariff is a reduced energy tariff for certain categories of people (social welfare recipients, beneficiaries of increased BIM benefits). As the graph below shows, the social tariff represents a very important benefit for those on the lowest incomes. The FGTB has recommended that the current system be extended and made permanent. Unfortunately, for some recipients with BIM status, this tariff is not granted automatically. It turns out that the “non-use” rate of those entitled to this status is very high.

Source : CREG, 2022

SOCIAL TARIFF & NORMAL TARIFF (ANNUAL BILL, PRICES OCT. ‘22)

We appear to be stuck with high energy inflation. But the tide may soon turn. The Planning Bureau is predicting a return to “more normal” inflation levels during 2023.

INFLATION WILL SLOW DOWN UNTIL NEXT SUMMER

Health Index (base 2013) Consumer Price Index (base 2013)

Source : Planning Bureau, 2022

1.2 Households plunged into energy poverty

Rising prices have a relatively greater effect on the budgets of households with the lowest incomes. When more than 10% of the budget is spent on energy, this is called “energy poverty”. Together, the lowest 25% of income earners spend more than 10% of their budget on energy. Current inflation is therefore having a disastrous impact on their disposable income.

Source: Household budgets survey, 2020

DISTRIBUTION BY TYPE OF HOUSEHOLD – ENERGYL POVERTYTIQUE

The people on the lowest incomes are often tenants of where they live, not owners. Rented houses tend to be less well insulated and so result in higher costs for fuel. Furthermore, energy poverty is relatively more prevalent among people living on their own. Over 60% of the households in energy poverty are single-parent families, although they represent only 35% of all households. Share

Couples with child(ren) Other

Single-parent families

Couples with no children

Source : King Baudouin Foundation, 2022.

Live alone

In Belgium, the percentage of the population aged 16-74 experiencing difficulties or major difficulties in making ends meet increased from 11.7% in the third quarter of 2021 to 16.1% in the second quarter of 2022. If we look at this situation by income category, it is mainly those with the lowest incomes who have the greatest difficulties. Among the 20% of people with the lowest incomes (first income quintile), 34.2% found it difficult or very difficult to make ends meet in the second quarter of 2022 compared with 23.9% in the third quarter of 2021.

Source : Stabel - monitoring of living conditions, 2022.

These figures become more accurate if we add the statistics from the Public Welfare Centers. The coronavirus crisis has considerably increased the (financial) vulnerability of households, with the lowest income categories in particular seeing their savings dry up. This is now compounded by the increase in energy bills. The total number of people requesting monthly assistance from their PWC has increased by more than a third since the beginning of 2020. The increase in demand for food aid is particularly alarming.

Source : NBB, 2022

These figures become more accurate if we add the statistics from the PCSWs. The coronavirus crisis has considerably increased the (financial) vulnerability of households, with the lowest income categories in particular seeing their savings dry up. This is now compounded by the increase in energy bills. The total number of people requesting monthly assistance from their PCSW has increased by more than a third since the beginning of 2020. The increase in demand for food aid is particularly alarming.

RECIPIENTS OF SOCIAL INTEGRATION INCOME

Source : PPS social integration, 2022

Total SII Of whom recognised refugees

2. Protection of pay and purchasing power

Protecting jobs and the purchasing power of households remains our priority. We therefore not only demand a cap on energy prices, but we also want to strengthen wages and social rights. Automatic indexation is essential to protect our purchasing power.

2.1 Our automatic indexation system protects us – but only partially

Automatic indexation remains the main protective mechanism against the loss of purchasing power. In terms of the fall in real wages (this is the way pay changes to take the rise in prices into account), the loss remained relatively limited in Belgium compared with neighbouring countries in 2022. Only France fares better than us, because energy prices have been capped for some time. Also, in Belgium, we will make up for this loss in 2023 due to indexation applied with a slight delay.

But automatic indexation does not offer complete protection. For many workers, automatic indexation occurs only once a year, so they lose purchasing power at other times throughout the year. On the other hand, we should not forget that there is also a significant proportion of workers who do not benefit from indexation.

A number of sectors have no automatic indexation system. This affects around 52,000 employees. However, some workers can rely on company agreements that provide for indexation.

In other sectors not all wages are indexed, but only the minimum amounts for the sector are indexed. 255,000 employees work under these joint representation committees.

Source : BNB, OCDE Economic outlook, Netherlands Central Planning Bureaus, 2022

* Private sector employment under a joint representation committee, situation in Q2 2021

2.2 No pay increases, despite a rise in productivity

The blow to purchasing power from rising prices is significant and indexation is protected. However, it should not be forgotten that workers did not come into this crisis from a position of strength. Since the financial crisis of 2008, Belgian workers have hardly gained any purchasing power, despite their increased productivity.

Real wages have barely risen – 0.9% in Belgium since 2009. Real wage growth is what is left of a wage increase when price increases are factored in – i.e. minus inflation. This low figure is worthy of note, because in the Netherlands and France, real wages have grown by 3% and almost 6% respectively since 2009. And in Germany by 19%. Nominal wage growth includes all indexations and conventional wage increases (by collective agreement). This increase is insufficient to effectively ensure real wage growth. Inflation also needs to be better contained.

Source : Eurostat (NAMA_10_LP_ULC), 2022.

However, the productivity of Belgian companies has increased since the financial crisis. In other words, an hour’s work earns companies more and more every year, but this income has not been passed on to wages. The reasons: a jump in the index in 2015, low wage margins (1996 Act) and slightly higher inflation in Belgium than in neighbouring countries.

In a fair economy, wages rise in line with prices and productivity. In this way, workers are compensated for the rise in prices and for their contribution to the rise in profits. The distribution between wages and profits then remains balanced.

Productivity is increasing more strongly in industry and services than in neighbouring countries. In industry, our productivity has increased by 52% since 2000, while in neighbouring countries it has been by 41%, on average.

Source : Eurostat (NAMA_10_Lp) 2022

PRODUCTIVITY IN INDUSTRY (2000 = 100)

In the same way as the manufacturing industry, services have also seen a sharp rise in productivity since 2000.

Nevertheless, the wages curve no longer follows the productivity curve. Since 1996, productivity has grown much faster than wages.

PRODUCTIVITY AND WAGES HAVE DIVERGED SHARPLY SINCE 1996

* It should be noted that 020 was distorted by the coronavirus crisis: a fall in hours worked causes hourly wages to increase.

Source : OCDE.stat –

& ULC, 2022

Source : Eurostat (NAMA_10_LP_ULC), 2022

This means a decrease in the share of wealth going to wages in the economy and an increase in the share of wealth going to profits.

FALL IN THE WAGE SHARE, RISE IN THE CAPITAL SHARE (IN % OF ADDED VALUE)

The share of the wealth produced that goes to shareholders is increasing. The share that goes to workers via wages and social protection is decreasing structurally. Also, some people are doing worse than others among the employed. The lowest wages are falling further and further behind the median wage (the median wage is the wage in the middle of the wage distribution scale). The lowest wages are therefore getting lower and lower. In 1999, a low wage (meaning the lowest 10% of wages) was just over 71% of the median wage. In 2020, it will be only 65%.

Source : NBB, quarterly sector accounts, 2022

THE

LOWEST WAGES ARE COLLAPSING IN BELGIUM

Percentage difference between the pre-tax monthly wages of the 10th, 20th to the 90th percentile and the median pre-tax wage in 1999 and 2020

1999 2020

Graphique : Minerva Think Tank

Source : Statbel 2020, wages structure survey

Created by Datawrapper

The FGTB is fighting hard against the Wage Act of 1996 – the legislation that keeps wages in a straitjacket. Apart from this fight, we are trying to obtain tangible progress for the lowest wages. In 2021, for example, we reached an agreement for increasing minimum wages. On 1st April 2022, they increased by €81 and a further €35 will be paid in 2024 and 2026. These are important measures, albeit insufficient to ensure a decent income for one and all. If we compare the minimum wage to the median wage, Belgium is not well placed compared with the rest of the OECD. In 2000, the Belgian minimum wage was 50% of the median wage, it is currently around 45%. The graph below shows the break in the trend since 2018.

The lowest wages are falling behind median wages in Belgium, but not in other OECD countries.

OECD average

RELATIONSHIP

3. Businesses in trouble?

The financial crisis, Brexit, the pandemic – and now war. As each crisis comes along, the employer federations present the same scenario: “competitiveness is under threat, large-scale support from the State is required, pay cuts are ‘useful for the economy’”. FGTB does not deny that the current energy crisis is having an impact on many companies, especially on small independents and some SMEs. But the discourse we hear from the big industrial groups, represented by the FEB, ignores an important reality: many companies are doing better than ever. Some are profiting from this crisis, while others entered it with significant financial reserves.

3.1 Historically high company profit margins

In recent years, companies have increased their profit margins considerably. The profit margin is what is left as profit after deducting all costs. This trend can be observed in different sectors. In the first half of this year, Belgian corporate profits reached a record level: in 1999, profit margins were still 35%; in the second quarter of 2022, they rose to over 45% (source: NBB).

GROSS PROFIT MARGINS OF NON-FINANCIAL COMPANIES (1999-2022)

Source : NBB, Main indicators from the quarterly sector accounts 2022

As an indicator of profit margin, the gross operating surplus is compared with the value added of the company. ‘Gross’ means without taking depreciation into account.

Compared with neighbouring countries, this is particularly high: only in the Netherlands are profit margins a little over 40%.

Source : Eurostat (NASA_10_KI), 2022

GROSS PROFIT MARGINS – 2009 VS 2021

As the graph below shows, corporate profits (expressed as gross operating surplus) have grown proportionately much more than the total wage bill. In a fair economy, this would happen at the same rate.

WAGES ARE GROWING LESS QUICKLY THAN PROFITS (1999 = 100)

Source : NBB, Main indicators from the quarterly sector accounts 2022

Gross operating surplus Wages

NB: Profits are expressed as gross operating surplus, remuneration as total remuneration of non-financial corporations

Currently, many companies have sufficient margin to absorb cost increases without passing them on in the price. However, in many cases, they choose instead to increase their prices, even beyond the cost increase. This fuels inflation. The fact that companies point to wage indexation as the source of inflation is cynical. They have a choice to make: absorb the shock by using their large reserves or pass on the price increase, which further fuels inflation.

Another reason for the rise in profit margins is that the index jump introduced by the Michel government –with the aim of increasing competitiveness and reducing ‘wages costs’ – has failed to achieve its objective. Belgian companies did not use these interventions to lower their prices and become more attractive, but used them to increase their profit margins (source: NBB, 2019).

The bankruptcy figures show this to some extent. Despite the difficulties faced by some sectors, the number of bankruptcies is still lower than the average in the years before the coronavirus crisis. This may mean that significant reserves have been built up.

Source : SPF Economie, 2022

3.2 Automatic indexation: a danger for competitiveness?

Employers argue that indexation will cause wages to slip and harm competitiveness. Does automatic wage indexation actually cause more inflation in Belgium than in the rest of Europe?

The overall price level (excluding energy) has risen by just under 10% in Belgium since the beginning of 2020. This is exactly the same as in the rest of the eurozone, but less than in Germany and the Netherlands, which do not have automatic indexation.

As noted above, many workers receive only one indexation per year. Trade unions abroad will also demand compensation for price increases. Wages in neighbouring countries will therefore rise just as fast, although they will have to wait a little longer than in Belgium.

INFLATION IN BELGIUM AND NEIGHBOURING COUNTRIES (EXCLUDING ENERGY)

Employers are always talking about Belgian wages increasing at a much faster rate than in neighbouring countries. But they also systematically ‘forget’ to talk about wage subsidies. In Belgium, wage costs are reduced by all sorts of subsidies in the form of public aid granted to companies to reduce the wages burden for things such as night work, overtime, shift work, R&D, etc. All are subsidised. In 2020, these subsidies amounted to more than 9 billion euros. Wage subsidies are the most important type of economic support in Belgium. In neighbouring countries, they hardly exist, as the graph below shows

RATE OF WAGE SUBSIDIES (AS A % OF THE WAGE BILL)

Source : Conseil Central de l’Economi, 2022

NB: Figures for the Netherlands for 2020 are distorted by “Covid-19 support” and are not included.

To sum up, Belgian business are ultra-subsidised… but they behave as though they weren’t.

The difference in wages costs (also known as the wages ‘handicap’) between Belgium and its neighbours is central to the formation of wages. The law stipulates that this difference must remain zero. However, the way this difference is calculated is problematic. It does not take into account the billions of wage subsidies that we mentioned earlier. These considerably reduce the difference with neighbouring countries, although this is not to be seen in the official figures.

The graph below takes wage subsidies into account. The yellow line is the most important element for reading this graph. It shows the size of the gap between wages and costs since 1996, the starting point of the wages bill.

A figure below 100 indicates a labour cost advantage for Belgium: for example, by 2020 labour costs had risen 4% more slowly than in neighbouring countries since 1996. By the end of 2022, labour costs in Belgium will still have risen 2% more slowly than in neighbouring countries since 1996.

WAGES GAP SINCE

(1996 = 100)

Source : OCDE, Belgium Country Report 2022, own calculations

4.

There is therefore an urgent need to reform the 1996 law so that all of the measures for reducing labour costs are taken properly into account. In addition, there are the tax exemption measures which further reduce the cost of labour, but which are not taken into account in the calculation of the wages ‘handicap’.

We are supported in this by the International Labour Organisation. In November 2022, the ILO ruled that the strengthened law of 1996 was in contradiction with ILO Convention 98. This convention guarantees the autonomy of the social partners in wage negotiations. It is an autonomy that does not currently exist in Belgium.

Who will pay the bill for successive crises?

The political right has a habit of depicting Belgium as an economic graveyard where public finances are on the brink of collapse. Only with heavy restructuring and “structural” reforms would Belgium still have a future. Healthy public finances are also important for the FGTB, but the current situation is so exceptional that a budget surplus should not be the priority for the moment. The overall context is not as dramatic as people claim.

Since 2013, the government’s primary balance has again been above zero. This figure is important because it make an allowance for the difference between government revenue and expenditure without taking public debt into account. The figure below shows that tax can cover all expenditure.

Source : Federal Debt Agency, Planning Bureau

MOVEMENTS IN BELGIUM’S BUDGET DEFICIT (IN % OF GDP)

Economic recovery can be rapid. It can also be achieved through taxation. The same right-wing commentators predicted a long and lasting economic recession after the coronavirus crisis. However, a rapid recovery followed. By the summer of 2022, economic activity had already returned to the level forecast earlier, before the coronavirus crisis. As a result, Belgium received less aid than expected for the European Recovery and Resilience Plan (4.5 billion instead of 5.9 billion).

ECONOMIC ACTIVITY AT THE FORECAST LEVEL

Growth achieved (2022)

Growth forecast (2022)

Source : OECD economic outlooks november 2019, juin 2022

4.1 The 80% employment rate fetish

In the quest to achieve a balanced budget, one obsession is repeated in all political statements: the need to achieve an employment rate of 80%. All the miracles would then come from there. Having more people in work means fewer benefits and more income for the state. Which all sounds logical, but is it really?

Many things are overlooked in the debate. Belgium is said to have a low employment rate compared to its neighbours: barely 70% compared with 80% in the Netherlands. But there is a problem with this statistic. If you only work a few hours a week, you are still included in the numbers. And a person who works full time is given equal value. This is not a fair comparison. It means that the Netherlands, with its abundance of short-term and part-time contracts, appears to have a lot of workers in employment. What happens if we take into account the real working time (workload), and therefore if we consider employment in full-time equivalents? More people work in full-time equivalent roles in Belgium than in the Netherlands (61% versus 60% respectively). And it is precisely this total labour force that is important, because it is based on this number that social security contributions are paid.

Source : OECD stats

We already know that our productivity has continued to rise sharply. But does the average Belgian work less than other Europeans? Not at all: the average Belgian worker works 11% more hours than the Dutch, Germans or French.

Source : OECD.stats, 2022

The number of hours worked per worker on an annual basis has fallen in recent years, due to part-time working schemes, time-credit schemes and other forms of individual working time reduction. In Belgium, however, this development is much less pronounced than in neighbouring countries. There is an urgent need to relaunch the discussion on collective working time reduction, among other things.

* Average number of hours per person, annual, 1970 = 100.

Source : OECD.stats

4.2 A different look at public finances

This is not the time for fiscal austerity. Instead, the government should support the economy by investing, by creating jobs. This is the time to find new revenue streams. There is no shortage of options. Take the example of the totally failed and unfunded tax shift through which employers’ social security contributions were unilaterally reduced. The tax shift is offset somewhat by alternative financing, which is to the detriment of public finances. In an emergency, this tax shift can be reversed. 7.5 billion euros per year in 2022 alone.

Source : Planning Bureau, Statistical annex on the medium-term outlook, June 2022

The financing of social security is undermined by the proliferation of wage packages on which no (or almost no) contributions are paid. The straitjacket of the 1996 Act has led to a growth of alternative wage benefits that “cost” the social security system dearly.

The table below gives an overview of these wage benefits, their scope and the revenue losses for social security. In 2022, alternative remuneration packages accounted for 2 billion in lost revenue for social security. If we were to replace just stock options and warrants with “real” wages, this would generate half a billion in revenue for social security.

Source : SD Worx Survey 2020, fiscal data, Sigedis, FGTB research department’s own calculations

wage benefits (amounts for 2021)

From a tax point of view, we need to look for a tax on excess profits. Many companies are currently making huge profits simply because they happen to be in the right sector. This is particularly true in the energy sector. Companies such as Shell, Total or the Norwegian company Equinor made billions in extra profits in the first quarters of 2022.

(QUARTERLY

Source : quarterly results from the companies

Exxon Chevron Shell BP Equinor Total

OIL COMPANIES REPORT GOOD RESULTS

PROFITS IN BILLIONS OF DOLLARS)LARS)

How can these profits be explained in the electricity sector?

The increase in wholesale prices in the energy market has benefited various producers in the sector. Indeed, the pricing mechanism based on the “last kWh produced” (the marginal cost) has led to «windfall» profits (also called excess profits), in particular for nuclear power producers. Based on market prices in August 2022, CREG estimates that the profits of the nuclear power plants covered by the nuclear benefits, namely Doel 3 and 4 and Thiange 2 and 3, would amount to 2 billion euros for 2022 and 1.3 billion euros in 2023 and 2024. This will result in an income from nuclear of 712 million for 2022 and some 400 million for 2023 and 2024.

Given the continuous increase in prices since the beginning of 2022, in September 2022 the CREG recalculated the profits of the nuclear power plants subject to the nuclear annuity (Doel 3 and 4; Thiange 2 and 3) and therefore the new nuclear annuity amounts for 2022, 2023 and 2024.

Source : CREG, Study into the impact of persistently high prices on the wholesale gas and electricity market, 2022

Nuclear levy, in brief

The nuclear benefit is based on the difference between the cost of producing a kilowatt-hour from a nuclear power plant and the selling price of the electricity. Indeed, while the construction of a nuclear power plant is very expensive (between 3 and 6 billion euros), its operation is not. Once that cost has been amortised (which is the case for Belgian nuclear power plants), the plant is very profitable (if the price of electricity is high).

In 2015, the government introduced a levy (nuclear levy) amounting to 38% of the profit margin of the Doel 3 and 4 and Thiange 2 and 3 nuclear plants.

The October 2022 budget conclave decided to involve the entire energy sector by way of:

- taxing the excess profits generated in the energy sector (in addition to the nuclear levy). This tax was to come in to effect on 1st January 2022 and be applied until June 2023.

- a one-off contribution of 300 million euros for the gas transmission network operator, Fluxys

- a contribution of two times 300 million euros for the oil industry.

In total, these measures should bring the State 600 million euros in 2022 and 2.5 billion euros in 2023.

5. Social security: is there sufficient cover?

5.1 The holes in the net are getting bigger

Our social security receipts have been under pressure for years, due to the failure of the tax shift and the erosion of workers’ social contributions.

In times of crisis, we need a social security system that effectively supports the most vulnerable in society. And the social security system has shortcomings in this respect. Most benefits have been below the poverty line for years. The refusal of employers to improve them is appalling. It should be noted, however, that without the link to wellbeing in social benefits, the drop would have been even greater.

What is the link to wellbeing? It is a mechanism for increasing social benefits and linking them to a certain extent to movements in wages.

Social benefits should not only guarantee a decent income in case of illness, unemployment, old age, etc., but should also protect citizens against poverty. It is therefore essential to raise these minimum social benefits above the poverty line. We cannot continue to consciously create poverty. The fight against poverty must be an absolute priority. This includes abolishing the status of cohabitant.

What is the status of cohabitant, in brief? A person who pays social security, if they decide to live (legally) with someone else, will lose a (big) part of their already low benefit. Our aim is to abolish this status and to individualise rights. Everyone must be able to build up their own rights. It’s a question of power of living, but also of emancipation.

SOCIAL MINIMUMS EXPRESSED AS A PERCENTAGE OF THE POVERTY LINE (AUGUST 2022 - 3 REGIONS)

Minimum pension guarantee – Person living alone – Survivor’s pension Minimum

Pension guarantee – Person living alone – Survivor’s pension

Minimum disability benefit – Person living alone

Income guarantee allowance for the elderly – Person living alone

Minimum pension guarantee – Couple

Minimum unemployment benefit – Person living alone

Minimum unemployment benefit – Single-parent family with two children

Living wage – Single-parent family with two children

Minimum disability benefit – Couple

Income guarantee allowance for the elderly – Couple

Minimum wage – Couple with two children

Minimum disability benefit – Couple with two children

Income replacement benefit – Person living alone

Living wage – Person living alone

Minimum unemployment benefit – Couple

Income replacement benefit – Couple

Living wage – Couple

Income replacement benefit – Couple with two children

Minimum unemployment benefit – Couple with two children

Source : FPS Social Security

5.2 Pensions

We believe it is imperative that pension reform be consistent with the reality of the working world. It is time to stop considering pensions as a budgetary adjustment variable, but rather as an essential and priority social right.

By 2030, the statutory retirement age will gradually rise to 67, while the average healthy life expectancy is only 63.8 years in 2020 (Eurostat).

Working longer is impossible for many people. The explosion in the number of people with long-term illnesses is proof of this. That’s why the FGTB recommends access to retirement after 40 years of working.

The FGTB has been asking for years that hardship at work be taken into account in future reforms. Night work, repetitive tasks, increased flexibility, significant psychosocial burden, etc., are, among others, criteria of hardship that should allow for earlier retirement, without any financial loss.

We managed to achieve the minimum pension at 1500 euros net, which is very good. But this could be called into question if the rules of access are changed. Another priority for he FGTB: the reassessment of women’s pensions. This means taking into account differences in careers and working conditions in the way pension benefits are calculated.

In Belgium, the net pension replacement rate is 62%. This rate is lower than in neighbouring countries, with the exception of Germany. The replacement rate is an indicator used to measure a pension system. It expresses the percentage of income that the pension represents, compared with the income received as an active worker in employment.

Source : Federal Pension Service, annual statistic of beneficiaries, 2022

It should be noted that the Netherlands has a very high net replacement rate, which is due to the presence of a private pension scheme. This guarantees almost universal coverage and is therefore described as “virtually mandatory”.

Rolling out the second pension pillar (sector-based and company pension systems) is not a priority for the FGTB. Although these pension systems are increasingly common, they are not equal, as the Audit Office has pointed out. This is why the FGTB is fighting for the first pension pillar (the statutory pension) to be strengthened.

NET PENSION REPLACEMENT RATE

Source : OECD

According to the report from the Financial Services and Markets Authority (FSMA):

- On 1 January 2020, the average worker had only 3,344 euros in reserves via the private pension system. This corresponds to EUR 14 per month as a supplement to the statutory pension. For workers close to retirement, the median pension reserve is EUR 9,119, or about EUR 38 gross per month in addition to the statutory pension.

- Only 53 joint representation committees have a sector-specific pension scheme (approximately 50% of joint representation committees).

- The majority of the members of these schemes are men, but there has been a slight and steady increase in the proportion of women over the years. In 2011, women still accounted for only 17% of active members of a sectoral pension scheme. The share of women has since increased year by year, reaching 41% in 2019.

It is therefore the statutory pension (first pillar) that remains the system that is the most secure and provides the most support.

6. Working in a period of inflation: Additional stress, working conditions

6.1 Depression and burnout

In the RIZIV/INAMI classification, burnout and depression are included in the disease group for “psychological disorders”.

In 2020, the findings were as follows for employees and jobseekers:

- 36.87% of people with disabilities were disabled due to a disease in the group for “psychological disorders”.

- Among these people with disabilities for psychological disorders, 46.10% suffered from depression and 19.37% from burnout.

Between 2016 and 2020, the number of people on long-term disability due to burnout and depression increased by 38.72%: +41.50% for depression, +32.53% for burnout. While over this period the total number of disabled people increased by 20.70%

- Women were affected to a greater extent, representing more than 2/3 of cases with depression and burnout.

- The age group most affected was the 50-59 year olds.

Source : RIZIV/INAMI

Group with “Psychological disorders”

Burnout

TOTAL 45 40 35 30 25 20 15 10 5 0

Depression

+41,50% +32,53% +38,72% +25,71% +20,70%

Cases of burnout, caused mainly by poor working conditions, is costly for the community. RIZIV/INAMI estimates that in 2019, the cost of compensation insurance payouts for long-term work disability due to depression or burnout amounted to more than 1.5 billion euros. It is therefore essential to improve working conditions in order to prevent burnout. This is in the interests of the worker, the employer and the community.

NUMBER OF EMPLOYEES AND JOBSEEKERS ON DISABILITY BENEFITS DUE TO BURNOUT, BY GENDER

– CHANGES 2016-2020

Source : RIZIV/INAMI

6.2 Disability

Between 2010 and 2020, the number of employees with disabilities increased by 71%. This was due, on the one hand, to population growth and, on the other, to the fact that diseases that used to be fatal, while they may no longer be fatal today, can still leave a disabling legacy. In 2020, this figure rose to more than 442,000 people with disabilities. In 2021, there was a slowdown in the growth of disabilities. The reasons for this slowdown have yet to be analysed. Several possibilities have been mentioned. For example, the fact that during the pandemic and lockdown, fewer people were declared unfit for work and disabled because they went to the doctor less.

A closer look shows that it is mainly women who are affected, as well as two age groups: those aged 30-34 and those aged 55 and over.

One of the reasons for this is the pressure to work, especially for the younger age group. Younger workers –mainly women – often have to combine a busy family life (arrival of their first children, young children, care for dependants, etc.) with increasing pressure at work. Furthermore, because of the difficulty of providing for lighter working conditions for older workers, they face health problems and inevitably fall into being unfit to work or disability. According to RIZIV/INAMI reports, this is also the consequence of the tightening of the conditions for accessing early retirement.

The term “disability” is understood to mean a period of illness for an employee in excess of twelve months.

It should be noted that for many years, musculoskeletal disorders (MSDs) – such as back pain, tendonitis, etc. – have been one of the top three most common and disabling occupational diseases and a major cause of disability. In 2020, in the private sector alone, 2092 claims for tendonitis were filed with FEDRIS (the Federal Agency for Occupational Risks). These are only the known cases. The actual figures are probably much higher. Finally, improving health and safety at work is now considered by the International Labour Organisation (ILO) as one of the fundamental areas for decent work, alongside trade union freedoms, the fight against discrimination, against child labour and against forced labour.

LONG-TERM ILLNESSES AMONG EMPLOYEES (DISABILITIES)

Source : RIZIV/INAMI

6.3 Precariousness by sector of activity

Employment in some sectors has been made more flexible (contracts without job stability, temporary work, flexi-jobs, part-time work, unstructured work patterns). A telling indicator is the change in the number of flexi-workers.

A flexi-job is a form of employment that allows a worker to work in a supplementary job under special conditions (low social security contributions, high flexibility of working hours, etc.) in certain sectors (e.g. hospitality, small bakeries and pastry shops, the food trade, certain sectors of retail, hairdressing salons, beauty salons and fitness centres).

NUMBER OF FLEXI-WORKERS

Source : NOSS

This situation has impacts on the health of workers. A recent study by the VUB (Precarious Work in Belgium) has shown that precarious employment is responsible for an unequal distribution of health and wellbeing risks in society.

According to this study, the two most precarious sectors are cleaning and service vouchers. The most precarious sectors are also, unsurprisingly, those where “general” health is the worst. There is also a strong relationship between precarious work and mental health in all the sectors studied.

These workers also find it difficult to combine their work and home life.

PRECARIOUSNESS INDEX BY SECTOR

Source: EPRES-BE survey, Interface Demography

6.4 Persistent discrimination on the employment market: ethnic origins

According to the latest “Socio-economic monitoring: Labour market and origin” from FPS Employment and Unia, groups of people of different origin do not hold the same position on the Belgian labour market. Although the trend is positive, people of foreign origin are still less likely to be employed and, if they are, it is often in less sustainable and positions of poorer quality. The differences between people of Belgian and foreign origin are significant, even when their level of education and qualifications and their field of study are identical. Finally, this monitoring shows that women of foreign origin are strongly over-represented in the service voucher system, especially those from Eastern European countries. The vast majority of them have been registered in the National Register for 5 years or less, including those with higher education.

EMPLOYMENT RATE BY ORIGIN AND LEVEL OF QUALIFICATION (AGES 20-64, 2018)

Source : Datawarehouse labour market and social protection, BCSS. Calculations and processing: FPS ELSDETCS

6.5 Teleworking

One of the realities undeniably linked to the pandemic is the increase in teleworking. The Covid-19 crisis and various lockdowns have made telework possible in places where it was not initially practised, as shown by new figures from Statbel, the Belgian office of statistics.

Telework had been increasing slightly for twenty years previously, rising from 6 to 8% in the early 2000s to 18.9% in 2019. A more recent survey by FPS Mobility and Transport shows that in four years, the proportion of workers working from home almost doubled. In 2018, 17% of Belgians worked from home at least one day a week. In 2022, this proportion increased to 32%.

Source : FPS Mobility and Transport

Teleworking has become a new reality. It can bring added value in terms of wellbeing and productivity, provided it is well managed.

In this respect, the FGTB demands the following:

• it should be voluntary and accessible to all;

• respect for working hours and working times, recording of working hours and the right to log off after working hours;

• fair compensation for additional costs incurred (including rising gas and electricity prices, ergonomic equipment, in particular);

• the use of effective means of communication between employees and employers;

• the availability of tools enabling all collective rights for remote working to be put into practice;

• the assessment and remediation of certain aspects of health and well-being;

• respect for workers’ privacy (if checks are in place, they mustn’t be disproportionate);

• the implementation of training for this new way of working to be managed in the best possible way.

6.6 Working conditions and inspection

Labour inspection controls are becoming increasingly rare.

But cases such as Borealis (a serious situation of social exploitation and human trafficking) in Antwerp can fall through the cracks.

It should be noted that in October 2022, the Vivaldi government decided to strengthen the labour inspectorate by hiring 50 additional staff. We hope that this will bear fruit in terms of improving working conditions.

WORKPLACE INSPECTIONS ARE DECLINING IN EUROPE

Based on a survey that asks: “Have you been visited by a labour inspector in the past three years?”

Austria

Denmark

Finland

Belgium

Ireland UK

Spain

Sweden

Portugal

Switzerland

Italy

Norway

France

Luxembourg

Netherlands

For Belgium, workplace inspections fell from 68% in 2014 to 50% in 2019, one of the most significant declines

Sources: Graph Maarten Hermans, Denktank Minerva. Data: European Agency for Safety at Work (2020)

7. Will the energy crisis lead to a just transition?

More than ever, we need to take the energy transition seriously. Natural disasters (heatwaves, fires, floods, droughts, etc.) are becoming more and more frequent and the current energy crisis is making us face up to our vulnerability with regard to energy supplies in Europe.

7.1 The climate or the urgent need to take action

The findings of the World Meteorological Organisation are worrying to say the least:

- the past seven years (2014-2021) have been the hottest ever recorded;

- the average temperature on the Earth’s surface is 1.11°C higher than in the pre-industrial era (period from 1850-1900);

- four key climate change indicators – greenhouse gas concentrations, sea level rises, ocean warming and acidification – set new records in 2021;

- extreme weather conditions, which are the day-to-day manifestation of climate change, have caused a major impact on the quality of life for many people, as well as economic damage in the hundreds of billions of dollars. They have also taken a heavy human toll.

The Intergovernmental Panel on Climate Change (IPCC) estimates that the average increase in the Earth’s surface temperature by 2100 compared to the period 1986-2005 will range from 0.3 to 1.7°C for the most ambitious emission reduction scenarios, and from 2.6 to 4.8°C for the least ambitious scenarios. The average increase predicted by the IPCC will therefore undoubtedly have an impact on our planet and on humanity as a whole. Less

+0,3°C to

+1,7°C

+2,6°C to

+4,8°C

The graph below clearly shows that the average annual temperature in Uccle (Brussels) has been gradually increasing since the late 1800s.

CHANGE IN THE AVERAGE TEMPERATURE IN UCCLE (1833-2021)

Annual values Trend curve (trend since 1981 +0.4°C per decade)¢

Source : RMI

THE 30 HOTTEST YEARS IN UCCLE (BRUSSELS) SINCE 1833

More worrying still, if we look at the warmest average temperatures over a long period, the 20 warmest years are after 1988, while the 20 coldest years were all recorded before 1896.

years 2011-2020

years 2001-2010

years 1991-2000 years before 1991

Source : RMI

7.2 Energy transition

The exit from nuclear: what is the situation in Belgium?

The FGTB has always considered that nuclear energy should be a transitional energy. The gradual phaseout of nuclear power for industrial electricity production on Belgian territory is regulated by the Act of 31st January 2003. This legislation was amended in 2013 and 2015 to extend the operating life of Tihange 1, Doel 1 and Doel 2 by 10 years.

Belgium had 7 nuclear reactors: 4 in Doel (Antwerp) and 3 in Tihange (Liège). Doel 3 was the first reactor to be shut down as part of the nuclear phase-out on 1 October 2022. Tihange 2 will be closed in February 2023. A few months ago, the Vivaldi government agreed on a ten-year extension of the two newest reactors, Tihange 3 and Doel 4, beyond 2025 (the date by which Belgium was supposed to have phased out nuclear power). These two reactors should be operational in October-November 2026 so that the country’s security of energy supply is guaranteed at the beginning of the winter of 2026-2027.

The phasing out of nuclear power has required and continues to require solutions to ensure security of supply. Security of supply is important for households as well as for small and large companies.

As the graph below shows, the proportion of renewable energy is increasing over time but remains insufficient.

In 2021, in Belgium, nuclear production represented 52.4% of production, renewable production (solar, onshore and offshore wind, biogas) was 18.9%.

(GROSS) ELECTRICITY PRODUCTION BY ENERGY VECTOR IN GWH (1990-2021)

Thermal Thermal non-renewable Thermal renewable Nuclear

* Thermal – renewable” includes solid and liquid biomass, biogas and renewable waste. “Thermal - non-renewable” includes solid and liquid fossil fuels, natural gas and non-renewable waste. “Other” includes hydrogen and chemical heat recovery.

Source : FPS Economy

For more than a decade, Belgium has been investing in energy-saving and also in renewable energies (wind, hydro, solar, geothermal, chemical and biomass).

In 2021, Belgium introduced a capacity remuneration mechanism (CRM) to ensure security of the electricity supply after the planned closure of all its nuclear power plants. This will support energy transition. From 2021 onwards, this mechanism should provide support via subsidies, through annual auctions, to companies that can supply or save electricity from 2025 onwards.

For the FGTB, ecological transition must become a tool for social justice. Social justice is a driver for the transition to a 100% carbon-free economy. In the transition to a climate-neutral society, our industry plays a crucial role, and here too the pandemic offers opportunities, as it has clearly demonstrated how vulnerable we are compared with other regions and how quickly supply chains are disrupted and broken. By resolutely playing the sustainability card as a society – in Belgium and in Europe – in the very short term, and by focusing on proximity and shortening supply chains, our industry can become more resilient and competitive, guaranteeing additional jobs and even ensuring the emergence of new industrial sectors.

7.3 The climate and inequalities

Climate warming is also a story of global inequality. While the worst effects are on the poorest, it is the rich who are most responsible. The richest people pollute much more with their consumption habits. Recent research has shown that the richest 10% of the world’s population was responsible for almost 50% of CO2 emissions in 2019, while the poorest 50% were responsible for just over 10%.

The way the FGTB sees it, this inequality is an important part of the climate problem and we are aware that the industrialised countries are making a major contribution to it. Not only do we advocate binding targets for sectors and companies, but we also want luxury consumption to be taxed or banned more heavily. And of course, international solidarity is also an important element of a fair climate policy.

SHARE OF EMISSIONS BY POPULATION GROUP IN THE WORLD TOTAL IN 2019

Source : https://www.nature.com/articles/s41893-022-00955-z

8. Union work in times of crisis

Belgium has one of the highest unionisation rates in Europe, with almost 50% of workers belonging to a union.

UNIONISATION RATE

Source : OECD

The rights to collective action and to exercise the right to strike have been recognised over time as fundamental and constitutive of democracy.

Belgium also has one of the highest rates of contractual coverage (96%). This means that negotiations cover most workers. This gives unions a recognised legitimacy. Moreover, as the OECD shows, higher collective bargaining coverage means a lower proportion of jobs associated with low pay.

Estonia

Lithuania

Poland

Greece

Romania

Hungary

Slovakia

Latvia

Bulgaria

Ireland

Czech Republic

Cyprus

Malta

Germany

Croatia

Luxembourg

Portugal

Netherlands

Slovenia

Spain

Denmark

Sweden

Finland

Belgium

France

Austria

Italy

COLLECTIVE BARGAINING COVERAGE RATE

Source : OECD, 2022

COLLECTIVE BARGAINING COVERAGE (%)

Trade union freedoms are under threat in Belgium. At the end of 2021, 17 FGTB trade unionists were given suspended prison sentences and fines of several hundred euros for being present at a roadblock on a strike day in 2015. The charge was malicious obstruction of traffic.

This conviction is also a threat to anyone who takes part in street mobilisation: environmental peace movements, farmers’ go-slow operations, etc.

For the FGTB, this ruling and the arguments on which it is based constitute an obstacle to the exercise of democratic rights.

More generally, and very regrettably, according to the International Trade Union Confederation’s “Trade Union Rights Violations Report” 2021, Belgium is on the list of countries where the situation deteriorated in 2021. In recent years, Belgium had already moved from the least negative category of “sporadic rights violations” to the category of “repeated rights violations”. It has since regressed further to category 3 of “regular rights violations”. For several years now, workers’ rights have been undermined (introduction of minimum service in transport, recourse to standby duty on the basis of unilateral requests as soon as there is a picket line, hindrance of freedom of collective bargaining on wage increases in particular, dismissal of union delegates).

Trade union freedom is essential for the enforcement of international labour rights and standards. This is why the FGTB will continue to defend it. The FGTB is also working to build a broader common front to ensure that Article 406 of the Penal Code is no longer applied to collective actions.

For more information:

FGTB

Rue Haute 42 | 1000 Brussels

Tel. +32 2 506 82 11 | Fax +32 2 506 82 29

infos@fgtb.be | www.fgtb.be

syndicatFGTB

Any reproduction, in whole or in part, of the text of this brochure is authorised only if the sources are explicitly mentioned.

Publisher: Thierry Bodson © January 2023

Cette brochure est également disponible en Français : www.fgtb.be/brochures

D/2023/1262/4