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

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. 

spain minimum wage
It's the second minimum wage increase in the last six months in Spain. Photo: Jaime Reina/AFP

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).

 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. 

“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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Workers in Spain earn 20 percent less than EU average

Despite being one of the largest economies in Europe, Spain may not be a good place to work for those looking to be well compensated as figures reveal workers earn a lot less than some of their European neighbours.

Workers in Spain earn 20 percent less than EU average

People working in Spain earn, on average, €1,751 per month. This is 20 percent less or €443 less than the EU average of €2,194, according to human resource giant Adecco and their monitor on wages, published Tuesday.

Life in Spain is getting more and more expensive due to soaring inflation and rising energy costs, but despite having the highest average salary in history, people in Spain can’t afford as much as they did 13 years ago, due to diminishing purchasing power.

Within the EU, Adecco reported that 15 countries have wages lower than Spain, and 11 have higher. 

Nine European countries have average salaries above €2,500 per month, while in Spain the average salary does not even reach €2,000. This is the case in Finland (€2,603), Sweden (€2,623), Austria (€2,788), Belgium (€2,830), the Netherlands (€2,883), Ireland (€2,920), Germany (€3,003), Denmark (€3,458 ) and Luxembourg (€3,502).

In Germany for example, employees earn on average 42 percent more than in Spain, meaning that workers in Spain would have to work 20 months, almost two years, to be able to earn the same as a German.

There is more than €1,250 difference between what those in Germany are paid and what those in Spain are paid.

On the other hand, there are several EU countries with salaries less than in Spain. Those with average salaries of €1,100 are mostly found in Eastern Europe, with Bulgaria being the EU country with the lowest remuneration of just €562 per month.

This is followed by Romania (€718), Hungary (€798), Poland (€833), Croatia (€863), Latvia (€892), Slovakia (€977), Lithuania (€1,007), Greece (€1,034), Estonia (€1,053) and the Czech Republic (€1,078).

Spain forms part of the middle group that earn more than €1,100 per month but less than €2,500 per month. Those EU countries with salaries similar to Spain include Portugal (€1,106), Cyprus (€1,309), Malta (€1,329), Slovenia (€1,417), Italy (€2,074) and France (€2,446). However, there are of course wide gaps between these countries too.  

Compared to its nearest neighbours, Spanish workers earn 58 percent more than those in Portugal or €645 more per month, but 28.4 percent less than those in France or €695 less each month.