Spain government reaches agreement to raise minimum wage retroactively

by Lorraine Williamson
minimum wage in Spain

MADRID – The minimum wage (SMI) will be increased by €15 from September 1 this year. On Thursday evening, the Spanish government reached an agreement with the trade unions. However, the employers´organisations do not support this increase. 

After much discussion, the time has come in Spain! The current minimum wage of €950 will be retroactively increased by €15 from 1 September to €965 per month. On Thursday, the largest unions reached UGT and CC.OO. this agreement together with the Spanish government. The Ministry of Employment announced the agreement via Twitter. 

Target: 60% of average salary in Spain 

Experts recommended an increase of between €12 and €19 to the government in advance. The Spanish government aims to have the minimum wage at 60% of the average salary by the end of the current government term. To calculate this, the salary of a full-time employee in the Encuesta de Estructura Salarial 2018 of the INE is considered. 

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Because the parties have agreed on an increase of €15 for 2021, wages will experience the largest increase in the next two years. The aim is to increase the minimum wage to €1,000 on January 1, 2022, and to €1,060 a year later. 

Employer organisations do not support increase in SMI 

Employer organisations CEOE and Cepyme do not support this increase. Both sides believe that now is not the time to talk about raising the minimum wage. The economy should recover first. In addition, Cepyme is concerned that an increase will lead to the loss of a significant number of jobs, which will particularly affect workers in the hospitality and retail sectors, young and low-skilled workers. 

Spain seventh country in EU with highest minimum wage 

According to Eurostat, Spain is the seventh country with the highest minimum wage in the European Union. Luxembourg is at the top with €2,202 per month, Ireland is in second place with €1,724 per month, the Netherlands in third with €1,685 per month, Belgium is fourth with €1,626 per month, Germany in fifth with €1,614 per month and France in sixth place with €1,555 per month. 

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