BARCELONA, Catalonia – A group of seven economists has published the "Fènix" report, calling for a re-evaluation of Catalonia's economic strategy. The report, presented on Friday, argues that the region's growth is often based on low-value-added sectors with "highly subsidised wages", such as tourism and meat processing.
Modest Guinjoan, an author of the report and a business consultant and UPF professor, previously published "Créixer o progressar" (Grow or Progress), which warned that GDP growth does not always improve living conditions, especially when driven by population increases. The new report aims to spark public debate on Catalonia's strategic economic choices.
Guinjoan explained that the economists are concerned about the Catalan economy and the future of the country and society. He said they observe that things are "not well oriented" and hope the report's analysis and ideas will be considered by trade unions, business associations, and political institutions.
Rethinking Economic Growth
The report suggests that while Catalonia could grow indefinitely and cover basic services and infrastructure, such growth is not beneficial if it leads to a widening gap in per capita GDP compared to neighbouring regions. This, Guinjoan warned, would result in the "collapse of public services" and further strain on infrastructure.
The economists highlight sectors like meat production and mass tourism for their low wages and reliance on subsidies. Guinjoan clarified that these activities, particularly those benefiting non-local consumers, should be phased out. He pointed to the pork industry, where subsidies and low wages allow products to be sold cheaply abroad, primarily benefiting Chinese and other international consumers, as an example of a dysfunctional system.
In contrast, the report distinguishes between sectors that benefit local residents, such as care services and agriculture, which are considered socially justifiable for subsidies. Guinjoan questioned the benefit of subsidising low-cost tourism that primarily serves international visitors.
The Impact of Low Wages and Immigration
The report criticises mass, low-cost sun-and-beach tourism for its low prices, subsidised wages, and extensive use of 'fixed-discontinuous' contracts. While acknowledging that tourism supports other sectors like food and culture, the economists focus on the negative aspects of its most damaging forms.
From an economic perspective, the report links low-wage, low-qualification jobs to an "inexhaustible" international labour supply. Guinjoan stated that creating such jobs, which require no specific qualifications, goes against generating added value. He noted that waiters in Austria or Switzerland earn significantly more than their counterparts in Catalonia. To counter this, the report proposes increasing the interprofessional minimum wage.
Guinjoan dismissed fears that the report could be used to demonise immigrant workers. He argued that the report aims to modify the regulatory environment to ensure all jobs are as qualified and well-paid as possible. He stressed that no job should exist without a dignified wage, even if it means higher prices, as this corrects an "inefficiency" and "unjust" subsidy to workers and businesses.
A Differentiated Minimum Wage for Catalonia
Regarding the impact of a higher minimum wage, Guinjoan explained that it would inevitably serve as a reference for wages negotiated in collective agreements, potentially leading to a general increase in labour costs. However, he noted that past increases in the minimum wage have not significantly affected collective agreements, suggesting that the belief in a major impact is not supported by in-depth analysis.
While not specifying an exact figure, Guinjoan believes Catalonia's minimum wage should be differentiated from the rest of Spain. He suggested that if the Spanish minimum wage is 100, Catalonia's should be at least 130.
The report also identifies other sectors benefiting from subsidised wages, such as building surveillance, gardening, and construction, all of which serve domestic consumption. The economists advocate for a fiscal balance assessment of these sectors to determine the extent of subsidies and whether corrective measures are needed. They consider it non-negotiable that urgent corrections be applied first to sectors whose beneficiaries reside in other countries, such as pork exports and sun-and-beach tourism, which rely on subsidised wages.
The report's authors, including Miquel Puig, who wrote "Els salaris de la ira" (The Wages of Anger), argue that low wages attract an "infinite" labour supply. Guinjoan emphasised the need to set a limit, with a higher interprofessional minimum wage ensuring more dignified treatment for workers. He also raised concerns about the impact on self-employed individuals in sectors like nail salons, bars, greengrocers, restaurants, and 24-hour shops, which are transforming the economic landscape.
