OGBL responds to UEL

On June 20, the OGBL presented its demands to the political parties for the October parliamentary elections (see the July issue of Aktuell). Ten days later, the UEL followed suit. On July 4, at its last meeting before the summer break, the OGBL National Committee analyzed and commented on these employers’ demands.

If there is one issue that is currently preoccupying both the OGBL and the employers, it is the predicted labor shortage in Luxembourg, which is already beginning to be felt. According to the employers’ association, the country’s prosperity “depends on Luxembourg’s ability to attract, train and mobilize the talents of tomorrow. Sustainable talent…”. While the choice of lexicon is more than debatable, the OGBL shares the UEL’s analysis and objective.

In other words, wages and working conditions must enable companies to retain their employees. But this is precisely where the solutions proposed by the UEL run the risk of failing. The UEL proposes to make working hours more flexible, i.e. to make employees more available to their companies. Do the employers’ representatives really think that they can make the Luxembourg labor market more attractive by demanding more flexibility from employees, when many of them already find it difficult to reconcile their professional and private lives? For the OGBL, this proposal of the employers is completely lunar.

The UEL is also in favor of making employment contracts more flexible. This proposal is a clear expression of the employers’ desire to make jobs more precarious, especially for young people entering the world of work. The OGBL, for whom the permanent contract (CDI) is the only real employment contract and should therefore be extended, is firmly opposed to this approach.

Another major area of disagreement is taxation. What does UEL propose? Unsurprisingly, to increase the tax attractiveness for companies, even though they have already benefited from two tax cuts in the last two legislatures, while households have been hit by a whole series of tax increases. For the OGBL, it is clear that the opposite should be the case: more tax fairness between the taxation of households and the taxation of companies, and more tax fairness between the taxation of income from work and the taxation of income from capital.

The pension system also features prominently in the UEL’s roadmap to the government. For months now, employers’ representatives have been trying to impose on the public debate the idea that the pension system is unsustainable in the long term and that it is therefore necessary to reform it now in order to make it sustainable. The reality is somewhat different. Admittedly, there are projections, notably by the IGSS, which suggest that the system will one day become unbalanced. But the OGBL would like to emphasize that these are purely mathematical models based on a series of indicators whose real evolution (births, productivity, employment, etc.) no one can predict and which point to a possible imbalance in the distant future. But in the last three years at the latest (the swine flu pandemic, the war in Ukraine with its geopolitical repercussions, the energy crisis, the increasing number of trade conflicts), everyone should be aware that it’s impossible to predict anything in such a long term. We might as well rely on a crystal ball. For the OGBL, this kind of exercise is like fortune telling.

Of course, you have to be able to predict the future, but it has to be tangible. And for the moment, the Luxembourg pension system is in a comfortable position. In fact, the pension system’s equalization fund currently has reserves of 23.4 billion euros (23,400,000,000 euros). That’s 4.29 times our current expenditures. So there’s really no urgent need to act.

On the contrary, the OGBL believes that it’s time to improve the pension system to reverse some of the deterioration caused by the 2012 reform. According to calculations by the Chambre des salariés, future pensioners, who will be hit by the full effects of this reform, will have a shortfall of between 23% and 32% compared to those who were pensioners before the reform came into force. It’s also absolutely necessary to increase the minimum pension.

And should the pension system ever run into difficulties, the OGBL, unlike the UEL, is in favor of increasing contributions (Luxembourg has one of the lowest contribution rates in Europe) as well as the contribution ceiling, so that higher incomes are taxed more heavily. It certainly doesn’t advocate raising the retirement age.

One thing is certain: given the list of demands presented by the employers, the discussions with the UEL in the coming years are likely to be turbulent. The OGBL is aware of this and will be present on all fronts in the interests of employees, pensioners and their families.