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CONFIRMED: Spain to raise minimum wage to €1,000

The Local Spain
The Local Spain - [email protected]
CONFIRMED: Spain to raise minimum wage to €1,000
It's the second minimum wage increase in the last six months in Spain. Photo: Jaime Reina/AFP

Despite opposition from companies and business associations, Spain’s left-wing coalition government has confirmed that the country's minimum wage will be increased up to €1,000 gross over 14 payments, applicable from January 2022. 

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Spain’s Labour Minister Yolanda Díaz on Wednesday 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 22nd.

This represents a €35 increase from the current minimum wage of €965. On Tuesday, trade union UGT disclosed the suggested rise would be €31, but Díaz has decided it should be €4 higher to reach a round number of €1,000.

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

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 It will also 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 government has pushed through the 3.6 percent 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 have said the move responds more to “political aspirations than financial common sense”. 

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

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

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

According to the Unidas Podemos politician and second Deputy Prime Minister, it's "science fiction" to argue otherwise because it's been "empirically" proven that raising wages encourages people to spend more and this 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 by the end of 2023, Spain's minimum wage will represent around 60 percent of the average salary in the country.

This latest increase will benefits more than 1.8 million workers in Spain, according to the labour ministry, both full-time and part-time workers.

However, the previous rise in minimum wages resulted in the 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 still for many under new plans to raise rates based on real earnings.  

Even though job insecurity and unemployment remain relatively high in Spain, the country already has the seventh highest minimum wage rate in the EU.

Last Thursday, the Spanish government managed to pass a long-awaited labour reform aimed at ending rampant job insecurity with a majority of just one, but it quickly emerged that a PP deputy accidentally voted for the legislation and in doing so tipped the balance in favour of the government.

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

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