[Spain] Minimum wage will rise to €1,000

Despite opposition from companies and business associations, the Spanish Government has confirmed that the country's minimum wage will be increased up to €1,000 gross over 14 payments, from January 2022, The Local reports.

Yesterday Spain’s Labour Minister Yolanda Díaz announced that the Spanish Cabinet will approve an increase of the country’s minimum wage up to €1,000 at their next meeting on February 22.

The increase is a €35 hike from the current minimum wage of €965. On February 8, trade union UGT disclosed that the suggested rise would be €31, but Ms Díaz determined it should be €4 higher to reach a round number of €1,000.

This is a gross figure (pre-tax) which full-time minimum wage workers will receive over 14 payments - as is standard in Spain - with extra payments during the summer and another at Christmas (pagas extras) rather than 12 payments (one for every month).

The change will apply retroactively from January 2022, meaning minimum wagers will be paid an extra €35 for work carried out last month as well as this one.

Spain’s left-wing coalition government reportedly managed to push through the 3.6 per cent minimum wage rise thanks to the support of trade unions CCOO and UGT. And despite not receiving the green light during negotiations from business associations CEIE and Cepyme, which stated that the move responds more to “political aspirations than financial common sense”. 

In September 2021, the Spanish government approved a €15 rise in el salario mínimo from €950 to €965. That bill was also spearheaded by Yolanda Díaz and business associations rejected it as unfeasible and detrimental to job creation.

“This government fulfils its promises,” Ms Díaz said during a press conference on February 9. 

“Despite everything that’s been said, raising the minimum wage has been very positive for our country and our economy.”

The Unidas Podemos politician and second Deputy Prime Minister said it is “science fiction” to argue otherwise because it has been “empirically” proven that raising wages encourages people to spend more which, in turn, helps the economy.

“We are committed to having a work model that’s not based on low wages, competing like this equates to defending a bad economy, precarious businesses and a social model that is profoundly unfair”.

The government’s objective is that Spain’s minimum wage will represent around 60 per cent of the average salary in the country by the end of 2023.

According to the labour ministry, this latest increase will benefit more than 1.8 million workers in Spain, both full-time and part-time workers.

However, the previous minimum wage rise reportedly resulted in an increase of €8 in social security contributions for the country’s self-employed workers up to €294 a month, a figure that could increase further for many under new plans to raise rates based on real earnings.  

Despite job insecurity and unemployment remaining relatively high in Spain, the country already has the seventh-highest minimum wage rate in the EU.

On February 3, the Spanish government managed to pass a long-awaited labour reform aimed at ending widespread job insecurity with a majority of just one. However, it soon emerged that a PP deputy accidentally voted for the legislation and in doing so tipped the balance in favour of the government.

This latest move will also mean a salary increase for some 73,000 workers in Spain who belong to multi-service companies offering cleaning, gardening, maintenance and other services.

Source: The Local

(Links and quotes via original reporting)

Despite opposition from companies and business associations, the Spanish Government has confirmed that the country's minimum wage will be increased up to €1,000 gross over 14 payments, from January 2022, The Local reports.

Yesterday Spain’s Labour Minister Yolanda Díaz announced that the Spanish Cabinet will approve an increase of the country’s minimum wage up to €1,000 at their next meeting on February 22.

The increase is a €35 hike from the current minimum wage of €965. On February 8, trade union UGT disclosed that the suggested rise would be €31, but Ms Díaz determined it should be €4 higher to reach a round number of €1,000.

This is a gross figure (pre-tax) which full-time minimum wage workers will receive over 14 payments - as is standard in Spain - with extra payments during the summer and another at Christmas (pagas extras) rather than 12 payments (one for every month).

The change will apply retroactively from January 2022, meaning minimum wagers will be paid an extra €35 for work carried out last month as well as this one.

Spain’s left-wing coalition government reportedly managed to push through the 3.6 per cent minimum wage rise thanks to the support of trade unions CCOO and UGT. And despite not receiving the green light during negotiations from business associations CEIE and Cepyme, which stated that the move responds more to “political aspirations than financial common sense”. 

In September 2021, the Spanish government approved a €15 rise in el salario mínimo from €950 to €965. That bill was also spearheaded by Yolanda Díaz and business associations rejected it as unfeasible and detrimental to job creation.

“This government fulfils its promises,” Ms Díaz said during a press conference on February 9. 

“Despite everything that’s been said, raising the minimum wage has been very positive for our country and our economy.”

The Unidas Podemos politician and second Deputy Prime Minister said it is “science fiction” to argue otherwise because it has been “empirically” proven that raising wages encourages people to spend more which, in turn, helps the economy.

“We are committed to having a work model that’s not based on low wages, competing like this equates to defending a bad economy, precarious businesses and a social model that is profoundly unfair”.

The government’s objective is that Spain’s minimum wage will represent around 60 per cent of the average salary in the country by the end of 2023.

According to the labour ministry, this latest increase will benefit more than 1.8 million workers in Spain, both full-time and part-time workers.

However, the previous minimum wage rise reportedly resulted in an increase of €8 in social security contributions for the country’s self-employed workers up to €294 a month, a figure that could increase further for many under new plans to raise rates based on real earnings.  

Despite job insecurity and unemployment remaining relatively high in Spain, the country already has the seventh-highest minimum wage rate in the EU.

On February 3, the Spanish government managed to pass a long-awaited labour reform aimed at ending widespread job insecurity with a majority of just one. However, it soon emerged that a PP deputy accidentally voted for the legislation and in doing so tipped the balance in favour of the government.

This latest move will also mean a salary increase for some 73,000 workers in Spain who belong to multi-service companies offering cleaning, gardening, maintenance and other services.

Source: The Local

(Links and quotes via original reporting)