Spain, Going On And On About The Minimum Wage

Pedro mascarilla españitaSpanish PM Pedro Sánchez at the Parliament debate

The Ministry of Labour and Social Economy, headed by the second vice-president, Yolanda Díaz, has called the trade unions CC.OO. and UGT, and the employers’ organizations CEOE and Cepyme to a meeting on September 1.

The government’s intention, backed by UGT and CC.OO., is to raise again the interprofessional minimum wage, which, last year, was set at 950 euros.

Employers’ organisations are opposed to this, although, as the president of the Spanish Confederation of Employers’ Organisations (CEOE), Antonio Garamendi reminds us, raising the minimum wage is in the government’s hands after consultation with the Social and economic agents of the country. It is, in fact, a decision in the hands of the Executive.

The employers’ refusal is based on the current economic situation – according to the Bank of Spain, one in four Spanish companies is in a situation of insolvency – and on the fact that the minimum wage experienced a rise of 31.8% between 2018 and 2020, something without precedent in the Spanish economy. According to the Bank of Spain itself, the sharp rise in the minimum wage in 2019 must have led to the loss of 180,000 jobs.

For months, Nadia Calviño, First Vice-President and Minister of Economy, had publicly aligned herself with the employers, but the evidence that the PSOE needs the backing of Yolanda Díaz and Unidas Podemos to remain in government has forced a change of position.

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