Researchers from the University of Ghent claimed that the Federal Government had overestimated last year’s rise in energy bill prices, Le Soir reports. This miscalculation led wages to be indexed by 3.5% more than they should have been.
The three economists from the Flemish university, Gert Peersman, Koen Schoors and Milan van den Heuvel, went over 930,000 energy bills in an attempt to gauge the impact these bills had on last year's wage indexations Indeed, Belgian salaries are automatically raised in line with the cost of living and calculated by an index which includes any changes to Belgians’ energy bills.
The researchers found that the government had miscalculated the rise in energy bills due to the energy crisis, which they state only rose by 17% between 2018 and 2022 instead of the previously claimed 81%. The economists also revealed that 40% of Belgian households had in fact paid less on their energy bills in 2022 thanks to multiple government support measures.
Nonetheless, an "unprecedented" wave of automatic wage indexations occurred towards the end of last year, due to the high levels of inflation in Belgium throughout 2022. The University of Ghent's researchers are now claiming that these salary rises were 3.5% higher than they were supposed to be.
According to the economists, this unwarranted increase was due to three factors which the government failed to account for.
Firstly, the index is calculated on new energy contracts, whereas most families are said to have been under fixed-rate contracts which were subject to less volatile changes during the energy crisis.
Secondly, Belgian consumption levels are also included in the index’s calculations, but date back to 2018 – before the Covid-19 pandemic and energy crisis. This means that the reduction in consumption, due to energy-saving measures taken by Belgian households, was not included in the index.
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Finally, the government expected that families would need a full year before receiving the necessary financial aid from the state to protect them from the cost of living crisis. However, the university's research showed that the households had already received an energy premium of €100 in July of last year.
The economists are now using their research to call on the government to review the way they calculate the index and to include bills paid instead of estimating a potential raise. Such changes are necessary to avoid “social unrest” when the miscalculations no longer benefit consumers but companies instead, who then complain over increased labour costs.
Whether the Federal Government will follow the researchers' advice during this year's indexation, which is only set to occur once in 2023, remains to be seen.
