Spain wants to raise minimum wage (SMI) as soon as possible

by Lorraine Williamson
SMI minimum wage

MADRID – Unemployment has fallen sharply in Spain. And Minister Nadia Calviño of Economic Affairs sees an opportunity to increase the legal minimum wage (SMI) as soon as possible. According to her, the positive trend in the labour market points to economic recovery. 

If the prediction comes true, Spain will have 80,000 more premium payers by the end of August. Also, the labour market will already be back to the level it was before the corona pandemic. Therefore, excluding the seasonal effect, more than 460,000 jobs will have been created in four months. 

Minister and First Deputy Prime Minister Nadia Calviño has seen more and more opportunities to increase the minimum income. Spanish trade unions as well as second deputy prime minister and employment minister Yolanda Díaz have been urging Calviño for months to increase the lowest incomes. 

Increase won’t be long in coming 

“The development on the labour market makes us positive about the economic recovery (…). I hope this convincing recovery can give us a decisive push to reduce economic inequality,” Calviño told Europa Press. Last Tuesday, the minister was convinced an increase in the SMI would not be long in coming. In July, Calviño had already informed the Council of Ministers if the positive trend stabilised, an increase in the SMI minimum wage would be realised this year. 

nederlandse orthopeed

However, government sources have indicated no agreements are yet planned with the social partners on this subject. Secretary-General Unai Sordo of the CCOO union believes the government now has every reason to increase the SMI immediately. However, according to Sordo, this must be at least 2.9%. So the purchasing power of people with a gross monthly income of €950 does not decrease due to inflation. 

60% of average income

That is a considerably larger increase than the expert committee of the Ministry of Employment has presented. She recommends an increase of between €12 and €19 per month (that is an increase of between 1.2 and 2%). A further increase in the SMI should then take place in 2022 and 2023. In those years, Prime Minister Sánchez wants to equalise the minimum wage to 60% of the average income in Spain. Therefore, this means an SMI of between €1,011 and €1,049 per month, which is paid fourteen times a year. 

ERTE

The UGT union on Thursday insisted on extending the ERTE work protection mechanism until at least December. Employees with an ERTE scheme are temporarily unemployed and during this period the Spanish government takes care of social contributions. Moreover, with the sharply reduced number of temporarily unemployed, the government could now easily investigate phantom companies. These are companies that commit fraud by manipulating this scheme. So that only the employees who are actually entitled to it can benefit from it for as long as possible. 

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