How Wage Indexing Saved Belgium's Economy

[@getcake8680]

As a Belgian it is rare to hear good news. Thanks TLDR!

[@Gliese380]

That's because you're a typical Belgian who knows very little about his own country and as a result derives his opinion on his own country from what stupid little stereotypes our hopelessly chauvinistic neighbouring countries know about it. It's a very common thing and has been going on for a very long time.

[@olska9498]

Don't worry, the bad news will start as soon as the debt-fueled growth will end and crash the economy, just like in Argentina, Greece, the German Reich etc.

[@tacobear1]

As a Belgian too, amen to that! :D

[@platinum-or3y]

@@Gliese380Take your meds

[@jimbojimbo6873]

Belgian women are fffiiinnnee Also worth noting people in Beglium speak English, French and Dutch so employability is so good

[@MaJuV]

Belgian here. The wage indexation makes sure that everybody's wage goes up. However, due to these wage increases, we're often less likely to get other type of promotions. Companies often point to the index as an excuse to not allow other type of wage increases. Though on that end, I'd rather see everybody get a wage increase rather than the few people assertive enough to ask for a promotion.

[@yorifant]

yeah exactly. i like the system the way it is right now.

[@kenleydriessens2918]

it has nothing to do with promotions just look at how much companys are leaving that and taxes its making us happy with a dead horse

[@evryatis9231]

they would find a different excuse anyways. might as well keep it that way

[@kenleydriessens2918]

@@evryatis9231 its the truth audi gone van hool gone and thats only my sector and i dont need exuses its the truth not even talking about places to go out too eat ect

[@jannoottenburghs5121]

​@@kenleydriessens2918He was reffering to the loonbkokkeringswet That is set in place just for the companies. And you can look at job loss. But that is something that happens in Europa as a whole. Even in countries with other tax rates and without wage indexing

[@michielp1922]

belgium also has the highest median wealth (median not average) in the world. Which is a very good way to show how much a normal guy owns. There aren't many billionaires in Belgium, but there's a very large and wealthy middle class and a good wealth distribution

[@The-Cat]

true

[@roelvaneyken211]

@michielp1922 For the moment, yes... Though increasing state regulations are increasingly ruining that.

[@ulyks]

I think you mean median wealth? Median gdp is far below the US. But yeah both are pretty high. Then again, we have a good location and our economy is propped up by the EU and the port of Antwerp which both serve a much larger area.

[@renaatsenechal]

​@@roelvaneyken211 how are state regulations increasing billionaires while deminishing the middle class? Almost by definition it is the reverse. I assume you mean they are decreasing the upper middle class

[@facundoibarra9339]

Belgistan

[@hiiamelecktro4985]

I feel like automatic indexing is simply the fair thing to do. It’s strange how, in other places, real wages just decrease if you don’t explicitly ask for a raise. It’s not like you’re doing less, your labor still produces the same value. So, you should be compensated accordingly.

[@roelvaneyken211]

That's not the whole story. If wages are indexed, expenses also rise for businesses in Belgium, which they factor into their prices, which affects purchasing power all the same (which the wage index is supposed to guarentee). That is why the discussion frequently comes up here in Belgium (I am Belgian) whether we should 'skip' the indexing of wages whenever it comes up.

[@dougdupont6134]

Well, theoretically, companies who want to attract or keep the best labor offer the highest salaries to remain competitive. Competition is the driving force when the government isn't involved.

[@anoniem9518]

You forget that we live in an open world economy. With these higher wages Belgium companies are not able to compete with companies in countries with lower wages. Automatically indexing wages, without any increase in productivity or profits, is detrimental to a country's ability to collect taxes, increases a countries debt burden, decreases its competitivity or investment climate. This is exactly what is happening to Belgium right know. One of the weakest countries in the EU.

[@renaatsenechal]

​@@roelvaneyken211there are multiple statistics in the video that contradict your assessment

[@blablabla0909]

HOHO! some media in Belgium says it's not. we have to be competitive with our neighbouring countries and they try to change automatic indexing. Companies complain about it (they dont get to be as greedy as their neighbours poor them). When you get the Automatic indexing some companies act like it's a gift/real raise but they are forced to do it. Thank god our goverment makes it hard to change it because there is much opposition and our Unions protest if they even try too change it. Always a fight against greed.

[@mckiwen]

In Spain we used to have the same system. After 2008 it was forced to change the system; since then we have not recovered the wealth prior to the financial crisis.

[@ayoCC]

Things like this should not be abolished due to a crisis, but just turned off temporarily, it should have been a part of the constitution.

[@Angel24Marin]

​​@@ayoCC For Spain the comparison to 2008 is a bit misleading because construction jobs of the time simply don't exist. That wage has a big component of debt from the company that was paying it and debt from the consumers as at the time private debt was around 200% GDP while public debt was below 40%.

[@fujin09]

but you now have one of the fastest growing economies in the developed world, and the credit worthiness of spain has surpassed even france.

[@mckiwen]

@@fujin09 so? By making everybody poorer? Spain had a 40% debt to GDP ratio in 2006 and a surplus on the budget, that didn't meant either that things were going good. Salaries must increase as living costs are slyrocketing.

[@mckiwen]

@@fujin09 and the status of the economy has more to do with the government change and the abolition of all austerity bullshit and the minimum wage increases than with all the nonsensical austerity programmes that were imposed back in the day.

[@TurielD]

Wage driven economic growth? Whoever could have predicted that?! Oh right Keynes.

[@FrankeNamensKarim]

Sadly we have nearly no real economics in political important positions, that's why our politicians are always trying to make the worst Hayek reform instead to establishing keynesianism

[@Alexander-z6x]

I find it funny that everytime a nation does well its because of socialist or socialist leaning politics.

[@roelvaneyken211]

@@Alexander-z6x I honestly think that is a selection bias...

[@LoneWolf-wp9dn]

did keynes predict everything moving to china?

[@Skrajne_centrum]

​@@LoneWolf-wp9dnChina have one od the most interventionistic economy model in the world

[@MichaelG.polo-3]

In my opinion

[@MichaelG.polo-3]

She's mostly on Telegrams, using the user name

[@MichaelG.polo-3]

LeasieAiken

[@josexaper7734]

LeasieAiken is among the best traders on the internet and I'll keep saying it every time.

[@Jamiebirch1514]

Thank you. I have searched, her and message her on her ‘Telegram’s, I think I am satisfied with her experience

[@Clintonreph]

Thanks for keeping it light and real at the same time. Much needed for us traders in times like these!

[@liamtahaney713]

Strong social safety net, robust worker protections, and the big one: automatic indexation. We also have extremely strong unions...make of that what you will. Also worth mentioning, belgium being a wealthy state affords it more room to carry a higher debt burden. This is all to the benefit of the financial sector who vacuum up belgian domestic savings and park them in belgian gov debt for profit. Belgian consumers are very risk adverse, which laeads to abnormally high savings in typical saving accounts that act as a sponge for belgian public debt. This is also helped by the robust safety net; people end up being able to afford more savings in a positive feedback loop.

[@colinsmith1288]

What makes Belguim great. It produces good stuff. It also has a varied market so no one industry is adversely affected.

[@stereomachine]

Wow. I know there are probably downsides to some of those things, but compared to the US's situation it sounds like heaven.

[@liamtahaney713]

@@stereomachine I am actually an american whose been living here for over three years, and I would never ever go back :)

[@yannickgodin955]

@@stereomachine Well, 50-55% taxes on your revenues might be one

[@ABC-ABC1234]

@@liamtahaney713 In the Dutch speaking part or the French speaking part? :) Do you speak any of the languages? :)

[@CasperSteuperaert]

Good to see some positive news about Belgium. The country is doing well, all things considered. Yes we have our problems: - High debt to GDP - Relative decline of industry and not enough economic headroom to turn the tide soon - Economic unevenness between the regions - A heavy state apparatus (though there are efforts to remedy this) But we have our strengths: - Strong social net - Incredible political stability - Stable purchasing power - Strong service sector - A general concern for the wellbeing of the middle class amongst politicians - Great food Belgians are notorious pessimists, it would do us good to see the bright side from time to time.

[@mmmhorsesteaks]

Yes, people often tend to be pessimistic but it would do us well to 'stop and smell the roses' on occasion... It's really mostly great, but will take efforts to make sure future generations will have the same relative comfort.

[@CasperSteuperaert]

@@mmmhorsesteaks A coherent industrial policy would be great. But that will be a bit hard if they try to balance the budget (even if it's not impossible)

[@the12th68]

​@@CasperSteuperaertI think the biggest budget cuts are gonna be in that social net and not so much for the economy.

[@blakedake19]

is this great belgian food in the room with us right now?

[@kenpe1455]

@@blakedake19 Best beer, best chocolate, best fries, best waffles,...

[@jipihorn]

As a French working in Belgium ( and really loving this little country), do you know that wages were indexed on inflation in France until 1983 when it was cancelled by the left party at the time... in the name of fight against inflation ?

[@jannoottenburghs5121]

Yeah PTB in Belgium is also against indexing for some reason

[@m3dm491]

And look at French situation nowadays : people are getting poorer and poorer while the debt is way higher than in Belgium.

[@Erowens98]

@@jannoottenburghs5121 There is always someone who can benefit from not paying people as much.

[@zeveroarerules]

In Belgium it's a right wing party trying to kill it (NVA)

[@jannoottenburghs5121]

@@Erowens98 yeah I know. But ptb is the leftist workers party. That is the strange part Maybe because they think they will help the trade unions with wage negotiarions. But the trade unions aren't asking to end wage indexation

[@antoniotorcoli-z7c]

Italy decided with the agreement of Trade Unions , not to index wages anymore in 1992. In real terms current wages decreased since that date. And Italy's economy doesn't fare well. What a surprise.

[@Duck-wc9de]

You remember what was going on in Italy before 1992, rigth? Pre 1992 Italy is why this system, the "Scala Mobile" was proven to not work.

[@antoniotorcoli-z7c]

@Duck-wc9de yes, I was there. Inflation 5,3 GDP growth 0,8 , more or less like today. The public debt was high but now it is much higher.What is your point? Belgium, where I live and work, has the highest median ( not average) personal and household income in the world, has a solid welfare and the economy is thriving, even if ,or because, the wages are indexed.

[@antdele99]

You clearly don't know how salary can increase. Salaries doesn't grow because you make a law, but because productivity per hour of work increase, if productivity doesn't increase, increasing wages by law only creates unemployment. The real problem of Italy isn't political as you say, but it's productivity that stagnated in the last 20 years.

[@antoniotorcoli5740]

​​​​​​@@antdele99you clearly do not know how salaries increase in Belgium. They increase by law as well because they are indexed BY LAW. On top of that there are of course increases due to TFP increase and other factors like collective bargaining. It is not difficult to grasp. Did you get it? Btw , thanks to this system ( and to other factors) Belgium has the highest median ( not average/ mean ) wealth in the World and the lowest Gini factor in the World as well. And the economy is thriving , Chicago boy.

[@Freedom4yt]

First title of the video: "How Belgium's Economy is doing surprisingly well" 2nd title of the video: "How wage Indexing Saved Belgium's Economy"

[@p.1019]

What's wage indexing? Sorry I have not watched the whole video.

[@apophistechandreviews2740]

​@@p.1019 The wage index in Belgium is a system designed to protect purchasing power by automatically adjusting wages to match inflation. This means that as the cost of living rises, wages increase accordingly. For entrepreneurs like us, while we pay out these indexed wages, we also benefit from tax incentives. This system ensures that both the working class and business owners can thrive in a fair and balanced economy. It's a smart and effective way to maintain economic stability and support everyone involved.

[@p.1019]

@@apophistechandreviews2740 Thanks!

[@apophistechandreviews2740]

@@p.1019 of course, no problem

[@murdoch201]

3rd title (that's not there): "How Belgium took loans to subsidize fake economic growth, and now has the highest debt growth of the EU."

[@RadicalDad]

Benelux is one of the best and richest ! Proud to live in one of those !❤

[@Randomstuffs261]

Thanks dad!

[@cawashka]

Same! :) very proud and grateful

[@dirkvandierdonck5831]

Same here ⚫🟡🔴

[@erikonthefloor]

❤🇧🇪🇳🇱🇱🇺❤️

[@kenny4459]

Benelux is getting it's ass overregulated by the EU ... (just ask the farmers ...) And our Belgian politicians should realy show THE FINGER towards pretentious EU. And right f*cking now!!!

[@berdeter]

Hello from Belgium. Not sure at all automatic indexation is the main cause of Belgian debt crisis. It might be one of the problems but far from being the only reason

[@LiquidDIO]

Yeah, I'd say failing to put a cap on immigrant unemployment money is another. At least, I heard that a lot while in West Vlaams.

[@stefanhaeussler821]

The fact that there's so many governments plus a royal family, and the lack of transparency in public services and investment execution doesn't help either

[@berdeter]

@stefanhaeussler821 Belgian policians are especially skilled at multiplying seats they can be elected on.

[@Timmerdetimmerdetim]

None of the above, it's about high costs of social security. High pensions to civil servants for example. I'm betting the next federal governement will address it thouroughly. albeit low key.

[@Kytetiger]

Each government is already cutting spending, instead of diversing the incomes. We have mutinational companies that pay minimum tax or have enormous tax cuts, other banks have "fiscal optimisation", and meanwhile last time i lost my id card, i had to wait 10 days to get an appointment at the city hall and had to wait 3 additionnal weeks to get my card. Cutting cost in the administration won't help.

[@shorunqualtec2070]

Belgian here, our wages were low compared to living costs before inflation, our index helped prevent further losses but living costs, especiallt housing, have still risen faster, We are not rich, our wages are not high when compared to costs.

[@apophistechandreviews2740]

I do agree with you on that part, although as a fashion designer and tailor in Antwerp and soon opening a store in Brussels I have to disagree on the part of our cost being higher then our income Yes the real estate market has increased dramatically over the past 4 years but that's due to the fact they want to implement a building stop and focus more on renovation rather than new projects. If we are being truthful here, our living situation could be much worse but maybe I shouldn't be the one talking for the crowd as I do live a complete different life then most Many people in other countries can't save half their payout and live on a 95% expense 5% saving route In Belgium the average saving percentage is allot higher then other eu countries Which allows us to pay more for the high demand sectors like "real estate"

[@kenleydriessens2918]

@@apophistechandreviews2740 and i agree if you think logicly it makes sence everybodys wage up boss have to pay more so do you indexsation is good but not automatic its going to cost us industry and industry is money so yeah

[@Erowens98]

We're talking about real hourly wages here, not just hourly wages. Real hourly wages are wages adjusted for inflation, by dividing them by a consumer price index. So, unless your consumer price index is inaccurate, the consumer prices are accounted for in real hourly wages. You might feel your wages are low compared to costs, but it's worse in most other European countries.

[@kenleydriessens2918]

@@Erowens98 thats bullshit for example go to the store in 2008 and now see the diffrence ik ga effe vlaams met u praten leeft u effectief in belgie ? koopkracht wordt verhoogd met indexering dus @shorunqualtec2070 is correct alle lonen prijzen gaan omhoog bij een indexering en das puur om de grote belastingen die dit land rijk is te betalen het mis manegent van onze politiek wij vullen hun gat in de begroting de werkende mens met als gevolg mooi loon ja je geeft het af aan inkopen de staat ect en nee andere staten lijden niet omdat die zich bewust zijn van de crisis dus zoeken lange termijn een oplosingen spanje italie en frankrijk hebben in verhouding tot meer werkgevers als wij en hoe komt dat ? omdat wij teveel kosten alle berdijven vertekken en in spanje ect niet zo neig waarom omdat daar een plan is hier niet binnen 4 jaar zit belgie tegen de grond net zoals wij betaald een baas nooit graag teveel je moet echt heel geshift zijn om te deznken dat dit werkt

[@tauernexpress]

And we spend because we get money !

[@TurielD]

Wage price spirals don't just happen. They can only happen when production reaches capacity, like during a war (US during Vietnam, or Russia today) or when critical resources are lacking (oil shocks).

[@barknbryce6993]

Also, it is mathematically illogical. Consider the price of any product or service. The amount of money that goes towards payroll cannot exceed the product or service cost. So, for any percentage increase in the salary, the overall price increase as a percentage cannot exceed the % salary increase. □ (denotes End of proof) For a spiral, other costs would have to increase above the inflation rate, which is not the employee's fault, so any indexation should not be scrapped because of high inflation rates. Doing so would only make the employees and the working class poorer.

[@Axelgear2006]

A wage index tied to basic necessities like food, shelter, clothing, etc., creates an incentive for the government (and private industry) to keep those costs low. A government that provides, for example, more public housing can keep costs low in the housing market in general, protecting themselves from wage price spirals. The wage price spirals in the 1970s and 80s were tied to Europe's dependence on fossil fuel imports, a thing that has repeated thanks to limiting trade with Russia. If the EU can move itself further and further away from reliance on foreign supplies for basic necessities, or at least friendshore as much as is feasible when that's not possible, it'll have less vulnerability to these sorts of spikes.

[@genmontgomeree9888]

I find it strange to say the Belgian economy is performing well. There are massive differences between the north (Flemish) side and the south (Walloon) side, including Brussels. We have one of the highest tax rates and have an enormous national debt that's growing.

[@senwor]

Yes, data and complaints aren't all equal. Every country has better and worse economic regions. The easy way out is to blame a different cultural region. What a lazy argument

[@DollieDaubney]

I hit $113k today. Thank you for all the knowledge and nuggets you had thrown my way over the last months. Started last month 2024. Financial education is indeed required for more than 70% of the society in the country as very few are literate on the subject.

[@SharmeenHerashchenko]

Same,I met Ms~Evelyn Vera last year for the first time at a conference here in Manchester,after then my family changed for good.God bless Ms~Evelyn.

[@FresyGiadans]

Absolutely! I've heard stories of people who started with little to no knowledge but made it out victoriously thanks to Ms. Evelyn Vera.

[@NicolasFar-u7b]

I do know Ms. Evelyn Vera, I also have even become successful....

[@NicolasFar-u7b]

After I raised up to 325k trading with her I bought a new House and a car here in the states 🇺🇸🇺🇸 also paid for my son's surgery (Oscar). Glory to God.shalom.

[@JocsanAgath]

Hey 👋please can you aid me on how to connect with her services???

[@SBAXCV95]

if only Belgium was a real country

[@BOZ_11]

Stop harping on about GDP if you want to gauge the wealth of people. Look at the average wage/average house-price multiple. Look at the unemployment rate and median inflation-indexed salaries.

[@kevoreilly6557]

All which means nothing if GDP is shrinking

[@BOZ_11]

@@kevoreilly6557 i've been an economist since 2007. you dont know what you're saying

[@apophistechandreviews2740]

Absolutely loved this video as a proud Belgian citizen and the owner of my own fashion atelier (with a second one opening soon)! It’s so refreshing to hear someone say something positive about Belgium-it’s rare these days. TLDR did an amazing job breaking this down; truly insightful and well-presented! Our country does have a lot of flaws, but so does every other country Their is no perfect country as perfection is diffrent for everybody Our healthcare system is amongst the best in the world and the amount of diffrent cultures and people enhances my proudness to live in this country Looking forward to see more! Subscribed ❤

[@grud8495]

Combining the VAT on electricity and gas part with the index and the conclusion that the index has an unsustainable strain on state finances is misleading. The reason Belgium had to decrease the VAT on energy is because energy prices were through the roof in a never before seen scenario. We are talking about suddenly having to pay 2000+ euro a month on energy bills for an average household. Absolutely insane scenario's. A very large part of that disaster has to do with The state's complete lack of care for Belgium's energy supply. Mostly in energy. We are in deep trouble with our nuclear energy supply. To this day it's still not fixed. So that disaster is the reason that strain happened.

[@francisdebriey3609]

You forget to mention that this wage is counterbalanced by one of the highest taxes on income with France.

[@markushaahr9194]

“It risks Wage-price Spirals!” In other words, corporations don’t get to charge double, and allocate Higher percentage pays to their “shareholders.” So basically the Banks telling us: “Inflation isn’t fun unless the Rich can benefit from it.” This inequality is directly resulting in people feeling contemptuous all around the world, something Bad happens, it affects everybody else, not the rich. In Belgium of course, this didn’t effect much since everyone is already rich so people are more capable of curbing the Rich’s enthusiasm with equitable action.

[@DrOktobermensch]

Here's the kicker - inflation is a good justification for increasing prices, but inflation in itself is a monetary issue! So indexation preserves spending power and living standards of the majority of workers, preventing the growth from being based on the squeezing of the majority out of their wealth.

[@markushaahr9194]

@ In my opinion, spending power and living standards should stay steady. Prices shouldn’t be raised to make employees bear the burden of a company’s financial trouble. The indignity infuriates me.

[@Jay_Johnson]

As was experienced with the end of old liberalism unless we return to the postwar consensus we will have socialist revolutions and fascist counterrevolutions. People will get more angry and polarised as inequality gets worse.

[@JohnSmith-d8o]

Belgium has also the highest income tax in the EU...to give you an idea an €100,000 gross annual salary is effectively taxed at 48%, leaving you with €52,000. In the UK, the same amount is taxed at 29%, leaving you €71,000 while healthcare is free and you likely still get private healthcare insurance from your employer on top of it. In Belgium you still have to pay extra social security "cotisations" and healthcare is not free (only part of it). So with this level of taxation it is basically not felt by the average people as the taxman gets back 50% of the extra money anyway. Food is also super expensive and huge GDP discrepancies between Flanders and Wallonia hiding the real picture, including high unemployment in the south part (8.2%).

[@diskette]

This is incorrect, tax rates vary depending on the income bracket. 48% is not applied to the entire income.

[@Fiztex553]

​@@diskette it's more or less correct - from 100k you'll pay 47k taxes before any returns if you are not resident. If you are resident then instead of 7% municipal tax you'll pay 0-9% depending on the municipality.

[@viora_]

100k is more than double Belgian median salary so indeed if you are earning that much, you will be contributing more.

[@Fiztex553]

@@viora_ it's hard to have a decent life even on 85k as the prices for everything are absolutely insane, especially given the service you get in return... Luckily expats get some tax discounts, but even then it's still ridiculous. I can't imagine trying to live on 50k here, poor people, maybe only possible as a big family where all work and pay really low for a living.

[@Jay_Johnson]

@@Fiztex553 not being able to live off the median salary says more about you than the economy of Belgium. Clearly the average earner is not ‘poor’

[@LordPinky455]

Be that as it may... there are increasingly more families (two working, earning parents with children) that need to get extra benefits from our social network since housing, heating, electrics are all rising too much. Not to mention if you have the malfortune to be incapable to work, due to handicap... life is still a struggle to get by. The majority of income goes to rent, paying off loans, food... The only people really getting richer... are politicians!

[@mds3697]

Wow there buddy, not so fast. Don't forget about the huisjesmelkers, they're experiencing amazing wealth!

[@superduperfreakyDj]

Side note: the indexation mechanism doesn't actually cover inflation entirely, this is due to its complex calculation method. And it has also been proven that there are certain income groups profit more from wage indexation than other groups. So these groups have actually seen a loss in purchasing power.

[@emilr7567]

Small correction: it depends per JIC when wage is increased, most people get their indexation in January. Some every quarter and some when the index exceeds a threshold.

[@tauernexpress]

It's rather rare to get it only at the end of the year. Retired and unemployed get it directly. State employed get it after one month. Most get it every two or three months or a couple of times a year. But once a year ? No...

[@olivierfrere2666]

5:27 your analysis is completely wrong. I am residing in Belgium. Because of this automatic wages increases, all companies are closing here and reopen in other countries, since wages are lower there. In the company I am working for, because of last year 11% wage increase, the company make now losses, and we had to get rid of 20% of the personnel

[@kobbebauws]

One factor that is not mentioned here but is always mentioned in Belgian news is how this indexation supposedly reduces our wage competitiveness with our neighbors. Do you have any information on that aspect?

[@johnjanssens8998]

That's why you get an index jump every once in a while and raises are restricted to the index and not higher most of the time

[@evryatis9231]

well, in pure economic theory thats true. why bother with employees whose salary will rise every year, (and they are usually pricy to begin with), compared to say, serbia. you have other advantages to make up for it, but its true that its still a point of worry

[@youssu]

I am an Italian engineer living and working in Belgium. To be honest, Belgium Is by far one of the ugliest Place I have ever been. However, salaries are good and overall work Life balance is excellent. I pay 50% of taxes and I am ok with that becuase highways are free and education and healthcare are decent. If they stop the indexation, no International talent will accept to live here.

[@marcoac-sx6lq]

​@@youssu​ no one in the world would ever accept to live above the latitude of Milan if salaries were not sensibly higher

[@youssu]

@@marcoac-sx6lq totally agree, apparently we have to choose between sun and friends or career and Money. Anyway I hate Belgium geographically but I can't complain about working conditions, at all.

[@tibodeclercq2131]

Wait !!!! Yes, we have this index thing in Belgium, but that doesn't mean we are rich. Like in most western countries most people in their 20s (including late 20s) can't buy a house (unlike their parents who were born in the 1970s and 1980s). People often say "Hotel mama" over here. (Btw: our national debt is almost the worst in the EU and many people don't work)

[@romanempire7170]

Many people don’t work because its easy to life on wellfare.. all thanks to PS.😂

[@Timmerdetimmerdetim]

The median net worth numbers don't lie though. I suspect home ownership is steady as ever. Just get that mortgage, amortize it and you'll be fine. groeten

[@tibodeclercq2131]

@Timmerdetimmerdetim Nee, we hebben weinig reden om optimistisch te zijn.

[@Timmerdetimmerdetim]

@@tibodeclercq2131 dat is jouw keuze

[@Timmerdetimmerdetim]

@@tibodeclercq2131 net even de nbb gelezen over betaalbaarheid v woningen en daar schrok ik van. Dus dat neem ik terug. Toch wil ik je moed en geluk toewensen op die woningmarkt mocht je daar zelf nog mee worstelen. Dat punt van mediaan-rijkdom blijft wel overeind dus gelukkig is niet alles zwart. De kwaliteit vd huizen ligt bvb ook hoger.

[@TheGrimFiend]

We do pay 50% on taxes tho.. the highest in europe

[@TheGrimFiend]

And everything is stupidly expensive

[@XY-uc1tw]

yea but getting very high´ wages for nothing also...

[@ovs4744]

As a Belgian. Wage indexing is horrible and goes to waste in extremely high tax rates. We literally have one of the highest debt in the EU while having one of the highest income taxrates in the world.

[@Masterrunescapeer]

You can't look at only tax rate. Yes, you do have a faster 50% start at 41k and up, but instead companies can do things like company car (basically any IT position has this), direct pay mortgage, etc., which makes figures like GDP PPP misleading, and even then Belgium is doing pretty well. The mean in Belgium is 3500 EUR/month or 42k a year which ends up around 2400 net (29% total tax), Germany is slightly higher at 3700 EUR mean and will end up being 2300 net (37%). Averages distort the picture a bit, it's when you're actually well off in Belgium that taxes kick in and I'm fine with that, it's why Belgium's class divide is actually decent.

[@nerenahd]

It's really very simple to explain it. They don't have a government 😂

[@RobinJ]

What's more complicated to explain is why that doesn't matter :) The federal government doesn't actually hold all that much power over people's daily lives.

[@CasperSteuperaert]

We have several backup governments :)

[@nerenahd]

@@RobinJ I know, I live in Brussels, but I´m not Belgian. I love it here, despite the weather... LOL

[@mmmhorsesteaks]

That's not true, we have like 5 at any one time.

[@ANDR0iD]

Well they do have a government most of the time, and it is a colorful government with a lot of voices and it only allows for really good laws to pass. Multi-pqrty governments are the best.

[@TheCapitex]

Yes, indexation is amazing, but the cost of living and the taxes are extremely punishing. As someone who lives here, I can say that the tax scheme is overcompensates this indexation.

[@marvinsantos2977]

its like double whammy for industries... increasing wages and tax. No wonder manufacturing or any of sort wont survive in this kind of economy.

[@kobbebauws]

Just to be clear: since indexation also applies to the tax brackets and those tax brackets are progressive, even since this indexation applies to your gross income it should translate fairly well to your net income. :)

[@youssu]

This is false, I am Italian and I work in Belgium and I can assure you that - without indexation - After the last years of +20% inflation you would feel way poorer, and people in Italy feel way poorer now, taxes are ok, they are High but you get good services out of them

[@VeryHighPriest]

We staan er weer goed op jongens!

[@romanempire7170]

Simpel figuur. België staat er miserabel voor!

[@VeryHighPriest]

@romanempire7170 das wat ze je willen doen geloven. Maar zoals je ziet in de video zeggen de cijfers iets volledigs anders!

[@tancreddehauteville764]

Wage indexing should be mandatory in every developed country. In the UK salaries are in constant decline, which causes an economic slump, which then generates further decline, in a never ending death spiral.

[@zedtrek]

Thanks god some good news. I'm refusing to watch any bad news till after Christmas.

[@Frahamen]

As Average Rob would say: the most underrated country in the whole galaxy!

[@theweirdsideofreddit3079]

Wow, people get payed more, meaning they can help the economy by spending money…

[@Worldymagus]

not if prices in the store's are dubble now !!!

[@theweirdsideofreddit3079]

@ don’t worry, I’m from the UK and our prices have all at least doubled too…but our wages have barely changed at all…in fact this year was the worst wage increase for me personally in the last decade

[@olska9498]

It's literally fueled by debt, as explained in the video. Once the debt is high enough, the economy will crash. It always does.

[@jensverweert8448]

@@olska9498 I don’t agree with that. The support hasn’t been because of the index but because of the rise of energy prices, which are excluded from the index. The deficit belgium has is because of our complex political structure and other things, not because of the indexation of wages. The energy support (also for Companies) also influenced the debt: it was huge.

[@vloh3097]

So it's the wage indexes that caused economic growth and not the Belgian government's deficit spending? I would not be so sure.

[@cmk353]

Why is Ireland always missing from stats?

[@austinmejia]

Love the move to make something like too long - I wish the premium edition was a unique version, like hardbound or more of a coffee table book ☕️

[@Reonsi]

Easy to understand: salary indexation will either cause wage-price spiral (private sector) or public deficit (public sector). It's impossible to just increase salaries without expecting any effects on costs (whatever those costs may be).

[@maxymvandenbogaert8345]

A thing you didn't mention is the "loonnormwet" or "wage norm law", it limits the percentage that wages can rise to stay competitive compared to neighbouring countries. The two keep each other in balance and are a compromise between trade unions and employers.

[@DaHitch]

Belgian wages are high? Someone forgot to tell my boss.

[@jorenbaplu5100]

Yet people will always complain. Even in the richest parts of the world, people are always unhappy and whining. Never been different

[@todo9633]

It's basically only possible because Belgium and Luxembourg only a small part of the EU, so they can't affect the Euro too much. If we see more European countries follow suit, that would likely risk higher inflation.

[@cadop]

Where’s Ireland in that graph?

[@anthonyanthony2783]

I'm from Brussels. With the huge inflation of 2022-2023 we all got about 11% indexation going from 2022 to 2023. My boss sent us all an e-mail announcing this like a raise for everyone xD while he had no choice as it's mandatory - he was just pretending as if he gave us all a present. And it's nothing like a raise because that's how much life became more expensive for everyone.

[@lucifdrinkstea2467]

As a 25j Belgian yea wage go up but prices also go up like creazy it stil feels like pennies so we have a very long way to go... also they really need to lower te tax on evrything mentalety and fix the coruption in politiks...

[@louis-philippearnhem6959]

The prices go up, therefore your wage go up. At your age I was short on money too. Just work and try to increase your wages.

[@santostv.]

Prices go up- check High taxes-check High Corruption for eu standards -check What’s the difference compared to my southern European country?

[@the12th68]

Might be interesting to do a follow up video on this. As the party´s that are trying to form a coalition might change the automatic indexation.

[@kauemoura]

Honestly, I am a public servant in Belgium and I really can't complain about my pay. And it is nice to see my pay raising every January.

[@deepinthewoods8078]

As a Belgian, i'm not complaining. Maybe the lesson is that wage indexation doesn't need to be abandoned during long periods with high inflation, but maybe just temporarily suspended ...

[@Husky_Passion]

yeah sure, want to see Belgium road's state ? easy to have money when you pocket it instead of using it for the people

[@kenpe1455]

It's getting much better, especially in Flanders. Not so in Wallonia though

[@riccardofredro1958]

I am an italian living in Belgium and my hypothesis is that we do not see wage price spiraling because belgian money is spent abroad and it increases prices there

[@MathieuVuylsteke]

One of the big disadvantages of the automated indexation is the cost for employers. With an extremely high income taxation this indexation leads to a disproportionately high cost for employers, making many go out of business in case of high inflation...

[@BasedHerodotus]

As a Belgian citizen I must say our minimum wage is very high. But we have high unemployment ( 4% in flanders 8% in wallonia and 12% in brussels ) We have huge taxes on bonuses so there is no incentive to perform. Also people who earn a gross income of 1800-2400 euros almost have the same income after tax so what is the point to earn more than 1800 before taxes ? Finally the independent/small businesses are litterally forced to do tax evasion just to survive. Belgium has a lot of issues, but lets start by ending unemployment benefits and fire most of our government employees... Don't even get me started

[@supalognon]

The wages going up with the indexation in Belgium is automatic because it is the law since the 1970's

[@M-tl4xt]

it was the same in italy, then we abolished it because europe asked us to. now we´re poor

[@serebii666]

@@M-tl4xt No, the "Scala Mobile" was proven not to work, Italy already had 90% Debt to GDP in 1990 and a 10% budget deficit, hence the reform in 1992. The reunification of Germany and collapse of the Eastern bloc also meant Italian manufacturing was outcompeted. You're poor because you never reformed the underlying problems from the 70s and 80s.

[@Eugensson]

Personal experience. Living in Belgium i don't feel it at all. The salary re-indexing is not keeping up with the cost of living increase since COVID. Like at all.

[@kianlakchi7182]

You're right the indexation is lower than the inflation but we're still much better off than without it and everyone with a job can afford to live a decent to good life here.

[@squitz7056]

you dont feel it because it is normal to you. If you went to Germany or france for 2 years and then come back you would be surprised how good we are doing

[@Eugensson]

@@kianlakchi7182 well the indexation affects the gross salaries, if we consider the crazy taxes Belgium has, then the net indexation effected is effectively halved for the employee. However, rents are also increasing with similar indexation rates, but there is not net/gross difference.

[@lorenzo6868]

Better than other countries anyway, take bread for example. It only got a little bit more expensive in real terms. Bread price in Belgium in 2014 was €2.40, average salary €3.414. One bread was 0.0702% of an average salary Bread price in Belgium in 2024 was €2.98, average salary €4.076. One bread was 0.0731% of an average salary

[@DedicatedDdos]

Ok, now try to imagine that difference without indexation.

[@Ratgibbon]

You gotta love how economists call it a 'wage/price' spiral. As if wages going up that caused the price increases, whereas it's the opposite: prices go up, so workers demand higher wages. Therefore it should be called a price/wage spiral.

[@kevoreilly6557]

Not true

[@jimbojimbo6873]

Bet a bug chunk of that goes on taxes

[@tinkruhoberec8981]

The important point missed is that Brussels is, de-facto, operative center of EU institutions. Meaning that all of the employees of European parliament, European Comission, Council of EU, European Council, EEAS, etc. have realtive high salaries > therefore spend more money in Brussels and Belgium in general. That leads to higher standard of living, dinning, consumption, investments in real-estate etc. Since all salaries from those institutions are funded from all member states, not just Belgium, that isn't a big exspenditure from just one country. Belgium can then enjoy higher standard of living, infrastructure investments, public transport and so on.

[@smilingcrocodile]

There's an estimated 60.000 EU related workers in Brussels, compared to 11 million inhabitants. EU workers make good money, but not to the point of pulling median income that much. And they are barely taxed, so they don't change much about the taxes the state levies

[@SirEpsilonn]

Source: I made it the fuck up? There's no way in hell they contribute that much that they are the reason our economy is staying upright ...

[@louis-philippearnhem6959]

We can't possibly rely financially only on 60.000 civil servants of an international organisation. That is delusional.

[@tinkruhoberec8981]

@@smilingcrocodile yes, i didnt suggest those jobs provide and substain the whole economy of Belgium, rather a substantial percentage.

[@VOTENATIONALALLIANCE]

Wages in Ireland have PLUMMETED for everyone but the top five percent. This sounds like a good scheme (limitless working class labour from immigration is another cause of declining wages, due to supply and demand. This is why the poor are mostly anti immigration, more competition for jobs, which lets employers get away with paying less = the Iron law of Supply and Demand).

[@bobtheman19]

This is completely false average hourly earnings have risen 4.5% from Q1 2023 to Q1 2024 in Ireland going from €28.54 to €29.82

[@neptune3569]

7:09 "Perhaps the general lesson here is that wage price indexing's main risk is an unsustainable strain on state finances" Well, that's disappointing. I thought the Belgians protected their wage prices by being clever, but it looks like they're just funding it with debt.

[@justasking9670]

As Belgian I don’t like my capital as it seems they don’t have the capital to improve their infrastructure. Capital of the EU 😅😅😅 it’s a joke !!! I’d rather live in the Netherlands or Neighboring cities of Germany earn a tiny less but have perfect infrastructure, security, cleanliness etc etc.

[@louis-philippearnhem6959]

0:48 This is beautiful Leuven (Louvain) ! Home to almost 60.000 students at the KULeuven University.

[@apophistechandreviews2740]

Yes! It really feels great seeing the city I grew up in, studied in, and still live very close by in Pellenberg Prices for houses are expensive like in most villages laying around leuven like Heverlee, Kessel-lo, Lubbeek and Linden but it's still one of the richest cities in terms of history besides Brussels and Antwerp Proud of being a part of it

[@HenriUA]

These systems are making many companies in Belgium suffer, making only extremely high margin companies like finance and pharma happy. Smaller companies are bleeding from this system and we are on the brink of very high percentage of bankruptcy.

[@louisvl10]

famous quote from my belgian uncle: a belgian is a frenchman who succeeded

[@Hazgar64]

Wage raises yes but the cost of living is mindboggling high so in the long run you earn the same as you did before in some cases even less

[@mmmhorsesteaks]

The cost of living has more or less remained comparable to the surrounding countries, where wages are not indexed.

[@kevoreilly6557]

Literally - no

[@Erowens98]

Real wage is rising. Thats wages adjusted according to consumer price index. Which means that increased cost of living is accounted for in the statistic.

[@rchatte100]

Belgium gets vast amounts of money from EU as many EU institutions based there.

[@tauernexpress]

Eurocrats don't pay taxes. They just make Brussels' house owners (big capital) rich. Belgizns see nothing of that

[@TheMusicGuard]

The EU money going to EU employees in Brussels is such a tiny amount compared to our economy.

[@LucLev]

We fled Belgium, increased cost of living, electricity is so expensive nowadays, Belgium has a huge hole in it's budget and is taxing the hell out of everything, everything is so regulated nowadays, the regulations on housing are just stupid; also the rise of the right and far right were another main reason to get out before it gets worse.

[@CasperSteuperaert]

It's worse basically everywhere else.

[@jorik41]

This is super interesting, especially because, if we were to believe many CEOs, every time the index approaches the tipping point, it supposedly makes us less competitive compared to neighboring countries and harms the Belgian economy. Another notable point is the higher taxation on labor compared to corporate profits, which means that it also increases government revenue when people get paid better. As for the reduction in energy taxes from 21% to 6%, they’ve offset this (after the price lowerd again) with an additional levy per kWh. This mostly decouples the tax from price fluctuations, that kinda sucks if you got a dynamic energy contract since even if the price is 0 you have to pay that . But i would imagine made it a more stable goverment income and does not increase the tax on top of the price shoots up so that something.

[@apophistechandreviews2740]

@@jorik41 As a business owner with 30 employees, I see both sides of the debate. The wage index undeniably helps employees maintain their purchasing power, which is essential for morale and productivity. However, as you mentioned, it does create challenges for competitiveness, especially when neighboring countries don't have a similar system. Balancing these increased costs while staying competitive is a constant struggle for businesses like mine. The higher taxation on labor compared to corporate profits is another interesting point-it’s a double-edged sword. While better wages increase government revenue, it also means businesses have to be even more strategic about managing labor costs. As for the energy tax adjustment, you're right-it does create stability for government income, but it’s frustrating for those of us with dynamic energy contracts. The fixed levy adds an extra layer of cost we can’t avoid, even during times of low energy prices. It’s a trade-off, like much of the Belgian system, where the focus seems to be on creating long-term stability at the expense of short-term flexibility.

[@idraote]

We used to have that in Italy. Then the fashionable economists of the time said it wasn't good for the economy and wage indexation went away.

[@bartvandenpoel8568]

BTW, if you look at real wage growth before 2020 Belgium was at the bottom of the graph, it works both ways. When the economy grows and there is low inflation, wage growth is capped.

[@bmradux]

I would have really liked to see Romania and Bulgaria also displayed in your charts!

[@nickdc1987]

It's not unique - Luxembourg has this too. We just skipped an indexation, hence the reduction.

[@LordSesshaku]

You got it all wrong 7:26. A strain in state finances lead invariably to either debt or printing money. Debt leads to runs against your currency, which causes inflation. And printing money causes inflation too. The source in spiral of inflation is still there, they just haven't fell to it yet due to the public finances of the small economy not being that bad+having the easy financial support of the european central bank and the common currency, two things that weren't really there for europe in the 70s and 80s.

[@kevoreilly6557]

Except Belgium can’t do that and actually the size of their economy has little impact on the euro overall … hence they get away it

[@laurentwallyn8734]

the health index is only for civil servants and bank employees or rent increase. it has a seperate system for wage increases called the spilindex. the automatic indexation depends from sector and isn't anytime the 2 percent is passed. it can be for example that people in construction get a wage increase of 3 percent, but people in the hospitality get 1.3 percent. also it always has to be convened by sector, so one company can not just increase its wages freely. btw the index for the private sector is the consumption price index.

[@sunil198925]

Yes but as a Belgian salary earner I have to point out that the taxation is also quite high. About 45% of my gross income goes towards taxes

[@hazardousmaterial5492]

Belgium is where Bruxelles is located, and that city is the HQ of all major EU institutions and bodies. That's also a big part of the reason

[@turkmenistan1940]

Belgium gets to be the most profitable proxy ever imagined to the Netherlands for which I tip my hat 🇧🇪❤🇳🇱

[@TorreFLoeckx]

Leve België 🇧🇪

[@leGUIGUI]

Reminder that Wage indexation does not create inflation: inflation happens FIRST and it cause the wage increase through the indexation system.

[@samleo6092]

Wake up babe! We're talking about Belgium today

[@paintedblack2806]

Thank god that the leading political parties want to abolisch wage indexing. We wouldn't like to keep a good economy after all...

[@Fanaro]

That "strain" on government is well worth it when compared to the benefits.

[@wardibald]

What worries me most about this, as a Belgian, is that despite this, most of the ruling political parties took a major hit in the recent elections, in favour of the right wing extremists. Same thing but worse, happened in the Netherlands, who are even doing a fair bit better. I'm used to parties getting clobbered when they actually underperformed in significant way. These days, public perception is heavily skewed toward resentment that everything is going horribly all the time, and it is working. And this is a global trend. I mean, let's be honest, given perception taking at least a bit of pace with reality, Trump would never have been elected this year. Something must be done about this. We can't keep going and let foreign powers peddle their malcontentism and conspiracies via social media and the like to the public.

[@kenpe1455]

The "far right" in Belgium is not economically rightwing at all, they don't want to get rid of wage indexation. NVA, VLD and MR are far more right economically. VB is only right on socio cultural issues.

[@wardibald]

@@kenpe1455 What far right is changes quickly to whatever resentment-inducing perception can be gained from it. In this case, they figured out they could get the vote of the elderly by standing up for increasing pension (of course they point to some migrant getting something - anything - while the elderly can't make ends meet etc) , or the vote of the common worker by suggesting to increase low-end wages in much the same way. Who'd pay for any of that is never included. Never had anyone ever heard of the Flemish far right "defending farmers" until it became clear farmers were angry and someone other than themselves could be perceived to get the blame for it. In this case the nature and climate policies of the "dreaded" EU. Of course it fits; peddling this form of malcontentism is easy if you can get people to believe climate change isn't real and they're just getting their hands in your pocket.

[@noneofyourbusiness5326]

Indexing kept real wages higher... and it kept real unemployment higher than the surrounding nations (excepting France). As Thomas Sowell has often said about wage laws, no matter what level the law sets the wage at (whether a minimum wage or indexed) the true minimum wage is $0, since you won't be paid for a job more than you are worth.

[@Murray-wr5no]

Belgium will on occasion have governments that do nothing for months at a time!

[@binagatramedia6258]

Belgium was one of the fastest recovering economies in Europe after World War II.

[@Cooperdepoep]

My college from Aruba living in Brussels wears this shirt every week that says: "BELGIUM Best country in the world". I used to laugh at it but I'd have to agree. I'm no patriot as I don't feel Belgium has an identity like other countries do but I think it survices us well. Best country in the world and nobody particularly enjoys it here. haha

[@CuracaoRevisited]

you forgot to mention that part Belgium's economic growth is funded by structural budget deficits

[@merrymachiavelli2041]

Presumably, in the long run wage increases are only sustainable if productivity goes up.

[@kevoreilly6557]

If you’re a member of the euro and your fellow countries pay (granted at a much lower scale)

[@tubetotto]

A similar mechsnism in '' 90-Poland lead to hyperinflation that ended up with Balcerowicz' plan. It could have worked in Belgium, because it small impact on Eurozone as a whole.

[@Timmerdetimmerdetim]

Hi fellow Belgians, has anyone seen or heard anything about this wage-price spiral in our latest elections? Because I've been paying attention and honestly, I've only heard about it for the first time righ now.

[@cedricdellafaille1361]

belgium wages HIGH????? try after taxes how our wages are.

[@millerrepin4452]

The fact you aren't talking about how your personal debt isn't increasing already puts you in a better place than many other 1st world countries

[@louiswilliamterminator2887]

I have been saving over the last 6 months to afford a banana

[@youssu]

Yes, in comparison to southern Europe, salaries are High, a waiter in Belgium gets the salary of a university professor in Italy

[@syproful]

It’s a system for the dumb, and I’m saying that because everyone seems to agree it’s good while in reality that thought is only fueled by selfishness. I’m on the paying side of things, and i can tell you we are on the cliff. We successfully achieved to be incapable to compete even with neighbors. The job market is imploding, companies are leaving and downsizing at an unseen pace. Remember, this is a artificial wage growth system.

[@BlackBase51]

As a belgian i can tell you this it is notttttt inline with inflation its also gross index what is even worse because we already pay most taxes to our government INT HE WHOLE WORLD its stupid its at around 53% if im not wrong