The proponents of indexation argue that wage rises are necessary to keep abreast of inflation and preserve the purchasing power of earners. That in turn helps maintain demand for local products, as earners purchasing power remains the same.

Supporters of the indexsprong (“index jump”, or skipping the indexation) argue that an automatic wage increase puts Belgian companies at a competitive disadvantage over neighbouring countries. According to another report produced last week by the National Bank of Belgium (NBB), the country’s “wage handicap” in relation to other countries is 3.9% and will rise to 4.6% in 2012. The situation is getting worse because other countries – such as Germany, where the differential is the greatest – are able to hold off on pay rises that happen automatically here.

“The existing automatic indexation system must urgently be amended so that we can cope better with external shocks like rising oil and gas prices,” said Unizo, the Flemish organisation that represents the self-employed, in a reaction to the NBB report. “A complete or partial index jump could go some way to removing our wage handicap.”

Konings studied the effects of increased wage costs on more than 100,000 companies between 1998 and 2010 and used it to calculate the effect of skipping indexation on job creation. The result: skipping pay rises would lead to almost 32,000 new jobs between now and 2015, assuming that wages would have gone up by 2%. Konings also look at the macro-economic effects, which show that a jump would avoid an increase in unemployment of 0.3% and a fall in consumption of 0.2%.

“This is the best evidence yet that a jump is the best plan for re-launching the economy,” said a spokesman for Voka, the Flemish chamber of commerce. Voka sponsors studies in economic growth at the KUL. Apart from its effect on competitivity, a jump would also free up some €200 million in budget savings for the federal government, according to Unizo. A few weeks ago, federal finance minister Steven Vanackere raised the subject of an index jump, but the idea was opposed by two prominent socialists: Bruno Tobback, chairman of the socialist party in Flanders, said the idea was “not up for discussion”, and federal minister of social affairs Laurette Onkelinx stated that “touching people’s wages will only happen without the socialist party”.