The director of the Federation of Luxembourg Industrialists (FEDIL), René Winkin, joined our colleagues from RTL Radio on Tuesday morning to discuss the upcoming wage indexations, rising energy costs, and the recent discussion on the reduction of working hours, among other things.
Luxembourg's industrial sector is currently facing a multitude of challenges. Labour shortages have been an issue for some time, and while the wage indexation was postponed in 2022, two indexations are due in 2023. Then there is the impact of the minimum wage increase on low-wage companies, and the high energy costs, which are a significant issue in several sectors.
No 'one-size-fits-all' model
Regarding the recent discussion on the reduction of working time, Winkin "doesn't believe" that a one-size-fits-all model for more than 400,000 employees is achievable. "In addition to the rapid evolution of wages, absenteeism, and rising energy costs, companies are now wondering if no one could come up with a better idea to add even more to that," the FEDIL director said.
Winkin went on to say that "the needs of employees are extremely varied," and "to think that we have a monopoly on the answer in this area would be presumptuous."
Instead, the FEDIL director thinks it would be preferable to have "a framework that allows the individual employees to find arrangements with their employers according to their needs, age, and family situations."
For Winkin, the question that politicians need to ask themselves during the upcoming election campaigns is what "trajectory" Luxembourg wants to take: do we want degrowth or "does the minister (of Labour) still want to generate high profits?"
2023 will be 'a difficult year'
High energy prices will continue to affect many companies in 2023. As a result, Winkin fears that "2023 will be a costly year for companies," which will find it difficult to cope with the price increases.
Since companies "will not be able to deduct this from their margins," they will have to raise prices. On the global market, meanwhile, they will face competition from markets that do not have this problem and can keep their prices low, Winkin explained.
What can politicians do to address this? According to the FEDIL director, "we really need a new model for the European electricity market." In addition, we could produce electricity at a lower cost than we do now.
The opportunities and "economic spin-offs" offered by the digital and energy transitions "must benefit our companies and our employees," Winkin stressed. He welcomes that Europe is "finally" reacting, because the United States, for example, "has a very aggressive policy."
Winkin thinks that "we need to start thinking beyond 1 January 2024," when the current tripartite decisions expire. "No one wants the 'big shock' to arrive at that moment," the FEDIL director said, advocating for a tripartite to be convened sometime in 2023. For Winkin, "there is no doubt that many companies will still need support beyond this year."