New minimum wage increase in Spain closer

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unemployment benefits

MADRID – The Spanish government, together with trade unions and employers’ organisations, has opened the possibility of a new increase in the Spanish minimum wage (SMI) in 2024.

No specific figures were put forward during the first meeting. However, there is a general consensus that an increase will occur before the end of this year. This step appears to follow from previous recommendations from the social partners for a total wage increase of 4%.

Tripartite agreement in sight

The current consultation is aimed at a tripartite agreement between the unions UGT and CCOO, employers’ organisations CEOE and Cepyme, and the government. The proposed 4% increase would bring the minimum wage to approximately €1,120 per month, up from the current €1,080. This fits within the objectives of the unions, which want to increase the minimum wage to 60% of the average wage and limit the loss of purchasing power.

Also read: Average annual salary in Spain lower than 20 years ago

Differing perspectives

There is a positive trend towards agreement. However, there are different perspectives on how to achieve the target of 60% of the average wage. And, furthermore, how to maintain purchasing power. These issues require further discussions and agreements.

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An important point of agreement between unions and employers is the need to adjust the regulations for price reviews in public contracts. This would allow for the impact of SMI increases in current contracts, a topic that also requires discussion with the Ministry of Finance.

Follow-up discussions planned

The next round of discussions is scheduled for December 11, with concrete figures expected. The unions emphasise that there are no insurmountable obstacles to a timely SMI increase in December 2023. The aim is to prevent the loss of purchasing power and reach an agreement on the calculation of 60% of the average wage.

Various proposals

Several proposals under consideration vary in the specific amount of the SMI for 2024. These proposals are also influenced by the expected wage increases for 2023 and the inflation of basic products, especially food. The unions are leaning towards an increase in line with the estimated wage increase of 5.2%. This would mean an SMI of approximately €1,136 per month.

It is important to emphasise that these amounts are based on a salary spread over 14 payments per year. Therefore, the monthly amount will be higher if additional benefits are included.

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