The human suffering in Ukraine is immense and leaves all of us aghast. Prosaic as it may sound by comparison, however, the economic effect of the Russia/Ukraine conflict is also trickling down into Belgium and the rest of the world, as prices for utilities and food are on the rise almost everywhere. Soon enough, Belgian employers will feel the impact of the increased cost of living in their own employment costs, as unusually almost all Belgian wage rates are in some form mechanically linked to the cost of living.
Indexation of wages is determined at industry-level and the methods differ depending on the sector: in the Chemicals sector for example, wages are increased not at a fixed time, but each time the consumer price index increases by 2%, which will next be the case later this month, for example. Joint Committee nr. 200 – one of the committees representing the most employees in Belgium (more than 480,000 in total) – has a different mechanism: salaries are only increased with effect from January each year to reflect the evolution of the adjusted health index over the previous year (health index being the consumer price index, minus certain unhealthy products, such as alcoholic beverages). Payroll agency SD Worx forecasts that the employees in JC 200 can count on an 8.38% pay increase in January ’23, and that on top of the already quite steep 3.58% increase at the start of this year.
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