2 February 2024

Spanish Prime Minister Pedro Sanchez in Madrid on December 20, 2022.

The Spanish government approved an 8% increase in the interprofessional minimum wage (SMI) for the year 2023, Tuesday February 14, in the Council of Ministers. This increase, negotiated with the unions, brings the SMI from 1,000 euros to 1,080 euros paid fourteen months (i.e. 1,260 euros over twelve months). It will apply retroactively to 1er January. In five years, since the Socialists came to power in Spain in 2018, the minimum wage has jumped by 47%.

For the left-wing coalition government, led by Pedro Sanchez, not only does this increase aim to offset inflation, which ended 2022 at 5.7% year-on-year (8.4% annual average), but it also makes it possible to respect the objective set at the start of the legislature to increase the SMI so that it represents 60% of the Spanish median wage. “Today we are keeping a promise and the recommendations of the European Social Charterwelcomed the Minister of Labor, the former communist Yolanda Diaz, on Tuesday. The increase in the SMI is the best tool to fight against the impoverishment of workers but also in favor of equality between the sexes, because women, like young people, are the first to be affected by this increase. »

The measure, on the other hand, did not convince the Spanish Confederation of Entrepreneurial Organizations (CEOE), which had proposed a contained increase in the SMI, of 4%, and warned of the risks of an excessively sudden increase in the SMI for small companies, farmers and public administration contractors. In agriculture, the SMI already represents 90% of the median wage, according to the National Institute of Statistics (INE). And nearly 80% in the hotel industry. Moreover, in 24 Spanish provinces, mainly in Extremadura and Andalusia, it represents more than 70% of the median salary, all activities combined.

Read also: Spain: thousands of people in the streets of Madrid to demand wage increases

Employers’ dissatisfaction

“Increasing the SMI by nearly 50% in recent years responds to an interventionist policy that mainly harms smaller companies, which are unfortunately those that are usually the least productive”said Gerardo Cuerva, president of the Spanish Confederation of SMEs (Cepyme).

“Business leaders are treated unfairly”, summed up, on Tuesday, the president of the CEOE, Antonio Garamendi, hitherto known for his aptitude for dialogue. A way also to react to the remarks made on Sunday by Pedro Sanchez, who had asked the bosses “consistency and accountability”, when it comes to raising private sector salaries. “The employers cannot demand sacrifices from those below, while those above are having a feast”he declared, before recalling that, during the last fifteen years, “the middle class and the workers” suffered from a “erosion” their purchasing power, prices having increased by 16% to 17% and wages by 10% on average.

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