Luxembourg: Developments in working life 2024: Industrial relations and social dialogue

The socio-political year 2024 has been characterized by a substantial deterioration of national-level social dialogue between the government and trade unions, alongside a parallel period of harmony between the government and employer organisations. The conflict between trade unions and the
government has crystallized around two main issues: a planned reform of the collective bargaining system and the issue of working time and opening hours in the retail sector. Furthermore, the government has initiated a public debate over the future of the pension system, a debate that trade unions see with concern.
Following the economic downturn in 2023, Luxembourg saw a modest recovery in 2024, with economic growth reaching 0.5%. This growth rate still falls short of the historical average growth of 3.2% observed between 1995 and 2021.
Inflation has subsided to 2% in 2024, partly due to continued government subsidies for gas and electricity, taking pressure away from the contentious issue of the automatic wage indexation mechanism. In 2025, inflation is expected to reach 2.1%.
Unemployment has slightly increased, up to 5.7%. Job creation has also slowed down in comparison to the previous year, reaching 1% (after increasing by 2.3% in 2023). This is the most modest growth of employment since 2009 in Luxembourg. The national statistical office has also noted a lesser growth of the number of cross-border workers in crucial sectors such as finances and IT, which may be the result of a decrease in attractiveness of the country’s labour market for qualified workers (Statec 2024).