From the history of indexation in Luxembourg to its pros and cons across the socio-economic spectrum, Aline Muller and Jean-Paul Olinger discuss with Lisa Burke.

Indexation of wages has existed in Luxembourg since 1975, across the public and private sector. This means that wages are automatically increased in accordance with the consumer price index. This average is monitored over a rolling period of six months using a 'cote d'application'.

However, Luxembourg is in the minority of countries using indexation for wages. The economic and social arguments are varied and nuanced, over which demographic one focuses on, and what time period.

How does indexation affect social inequalities, our competitive edge compared to neighbouring countries, and what voice does a freelancer have?

Through all of this discussion, the main aim for any government should be to:

"Maintain business activity and employment at the end of the COVID crisis whilst maintaining social cohesion”

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© Gert Peersman, Ghent University

My guests

Jean-Paul Olinger, Director of Union des Entreprises Luxembourgeoises (UEL) and the Institut National pour le Développement durable et la Responsabilité sociale des entreprises (INDR).

He holds an MBA from HEC Lausanne and a Master of Business Law and Taxation from the University of Mannheim.

Jean-Paul joined the tax team of KPMG Luxembourg in 2005, where he went from assistant to partner.

And in January 2018, he joined UEL.

Aline Muller, CEO of LISER (Luxembourg Institute of Socio-Economic Research), affiliate Professor of Economics and Finance at the University of Luxembourg and the University of Liège; andMember of the Board of Directors of the Luxembourg Central Bank.

LISER’s mission is to provide well-grounded and clear-cut answers to policy relevant questions with the objective to advance knowledge in economic, social and spatial sciences.

Aline presents at many leading international finance conferences and her work has been published in top ranked finance journals.

She regularly teaches financial economics and applied econometric courses at the Radboud University of Nijmegen, Maastricht University, Erasmus University Rotterdam, University of Luxembourg and University of Liège.

And also lectures at several universities in Europe, the Middle East, Africa and Australasia.

Indexation of Wages

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