One of the recurring exhortations in European contributions to this year's COP climate discussions has been the call for environmental policy to go hand in hand with protections of industry. This refrain has given much more airtime to the insistence that major industrial activities must continue than whether the actually can within the limits of climate objectives.
The emphasis is strongly on saving the driving forces behind the continent's economies, indeed expanding them, to save industry from being cannibalised by the behemoths that are China and India. But how to stop the slide towards post-industrialism is a contentious issue even without factoring in the environmental imperatives of the day.
Belgium has long since let go of the manufacturing and mining sectors that once comprised the country's economic bedrock; the Meuse valley is littered with the ghosts of yesterday's factories. And although business leaders and heads of state aren't asking to turn back the clock, they are concerned for the future of business today.
Among the measures proposed to safeguard and nurture our commercial interests, Belgium stands out on the question of employment as the only eurozone nation (alongside Luxembourg) to have automatic wage indexations, designed to protect the workforce from the jaws of inflation. Though the mechanism is imperfect since it tracks inflation of previous months rather than in the present day, it at least prevents the situation in nearby countries, where some sectors suffer a real-terms pay cut as inflation outstrips salary increases.
But this quirk of Belgium's remuneration standards is not universally popular and comes under particularly heavy criticism from business leaders, who have historically argued that it undermines national competitiveness. This was again the line of attack as the Federation of Belgian Companies claimed on Monday that "the system will crash" entirely as the economy struggles to sustain the high wages and industries move elsewhere.
Whilst alarmist in outlook, the dire warning is not new. The wage indexation has been around for the best part of a century, during which time industries in Belgium have arguably been more subject to trends seen across the continent than a victim of this local peculiarity. The argument against it doesn't guarantee that scrapping the measure would usher in a renaissance for Belgian business; neighbouring countries don't have it and are prey to the same pressures as here.
Notwithstanding its shortcomings, proponents praise the defence of purchasing power for consumers and counter that business owners are naturally inclined to look to lower staff costs as an obvious way to enlarge profit margins. No doubt Belgium's industry could do with a push, but must this come at the cost of employee wages?
Let @Orlando_tbt know.
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