Labor assures that the minimum wage is already at 60% of the average salary and says that now it is time to maintain its purchasing power

The Ministry of Labor believes that the objective of raising the minimum interprofessional salary (SMI) to 60% of the average salary in Spain has already been met with the current remuneration, as stated by sources from the department headed by Yolanda Díaz this Monday in a meeting with journalists. Therefore, to maintain that 60% ratio also next year, the SMI would have to increase hand in hand with general salaries and always above the accumulated inflation in 2023 so that workers do not lose purchasing power.

This is the argument that Labor uses at the negotiation table to raise the SMI in which employers and unions sit. The department led by Díaz has already stated that the increase they feel comfortable with is around 4%, although they have not officially put any number on the table.

Those who have specified more are businessmen and unions. The former are committed to raising the SMI by 3% – with an additional 1% if inflation in December exceeds 4% – as long as the Treasury is open to updating the rates of public contracts so that companies can pass that cost on to the administration.

In the case of worker representatives, CC OO is committed to raising the SMI by 5.2%, the same percentage by which salary costs have increased, according to the INE. On the other hand, UGT has defended on several occasions that the minimum wage must reach 1,200 euros in 14 payments to comply with the rule of 60% of the average salary.. An estimate that Labor rejects, considering that the data used by the union is from tax sources and not from the INE Salary Structure Survey, which is the reference established by the commission of experts appointed by Díaz.

From Labor they point out that the committee of experts appointed by the ministry to calculate how much the SMI needs to be raised has already fulfilled its original mandate, which was to estimate how much that 60% amounted to.. Consequently, they add that a new report will not be necessary to justify the increase like the one presented at this time last year, although the advisory commission will continue to function, but focused on other aspects.

According to the calculations of the department directed by Yolanda Díaz, the 1,080 gross euros per month in 14 payments that the current SMI amounts to, already represent 60% of the average remuneration of a full-time employee in Spain.. The basis for obtaining this figure is the salary structure survey published annually by the INE.. The problem is that the latest data for that statistic is from 2021, so the figures from 2022 and 2023 can only be estimates.

To overcome this lack of information, Labor estimated that Spanish salaries grew by 3.2% in 2022, in line with the increases included in collective labor agreements last year.. With these numbers in hand, Díaz's department assumes that the average gross salary of a full-time worker in 2022 was 2,186 euros per year in 14 payments, which, after deducting contributions and personal income tax, was reduced to 1,681 euros per month.. Following this reasoning, the net SMI – which amounts to 1,008 euros in 2023, discounting 72 euros of personal income tax – is already at 60%.

Less inequality without effects on employment

Labor insists that the negative predictions that were made about the SMI when the fastest pace of increases began have not come true.. In the department led by Díaz, they reject that the SMI has affected job creation and maintain that the latest published studies estimate the possible impact at 6,000 jobs, far from the 170,000 predicted by the Bank of Spain.

In addition, they maintain that the increases approved since 2018 have contributed to reducing inequality. To the point that, while the salaries of the 10% of Spaniards who earn the least have seen their salaries grow by 30% since 2018, the 10% with the best remuneration have noticed an increase of 9.5% in that period. This has made it possible to reduce the gap between the two ends of the salary spectrum.. While in 2018 the top 10% earned 10 times more than the lowest paid 10%, that difference has been reduced to eight times.