The decline of intermediate salaries: the SMI has grown 4 times more than the average salary since 2018 and narrows the remuneration ladder

The minimum interprofessional wage (SMI) has never risen as fast as in the last six years. Between 2018 and 2024, the minimum that can be paid by law in Spain has increased almost the same as in the previous 14 years (2004-2018). A speed of improvement that medium and high salaries have not been able to match. This has caused what we could call “intermediate salaries” to become increasingly closer to the minimum remuneration, especially in those sectors where there are more workers receiving the SMI.

Consequently, the salary tables of many agreements are 'flattening'. That is, the pay differences between the highest and lowest categories are blurring. A phenomenon that unions such as Workers' Commissions (CCOO) have already detected and now place among their priorities in collective bargaining.. Although at UGT they do not share this perception.

The latest increase in the SMI, approved by the Government last Tuesday, closes a cycle in which the minimum wage has grown by 54% since 2018. The slowness of the salary statistics means that we still do not have data on how much the rest of the salaries have grown in 2023. But if we take the latest available data (2022) as a reference, the average salary increased by 9.5% since 2018, while the minimum salary increased by 36% in that same period.. That is, the SMI has grown four times more than the average salary in the country.

This growth at different speeds was an effect sought by the Government. The objective of the Ministry of Labor with the SMI is to reach 60% of the average salary in the country to improve the living conditions of the lowest incomes.. Something that the department headed by Yolanda Díaz already considers accomplished, although unions such as UGT do not agree that the goal has been achieved.

The logical consequence of this rapid rise in the SMI is that the differences between this remuneration and the average or median salary have narrowed.. And so it has happened. A worker who received the average salary in Spain in 2022 (2,128 euros per month in 12 payments) earned 82% more than the minimum wage. In 2018 that difference was 126%, 44 points more. In the case of the median salary – which divides Spaniards into two exact halves: those who earn more and those who earn less than that figure – the remuneration is now 55% higher than the SMI, while in 2016 it was double.

Agreements “overrun” by the SMI

One of the effects that were expected to be achieved with the increases in the minimum wage was, precisely, to boost intermediate salaries in collective agreements.. Following this reasoning, the 'floor effect' of raising the SMI should drag the salaries of the higher categories towards higher figures to maintain the highest and lowest differences.. However, it seems that what is happening for now is just the opposite.

“As a general rule, there is no such effect,” says Raúl Olmos, deputy in the CCOO union action secretariat, in conversation with 20minutos.. “We are seeing a certain flattening in the tables because the lowest salaries rise faster, but there are no increases in the same proportion or additional ones in the rest of the salaries,” he adds.. “The SMI has been overcoming the differences in the tables,” summarizes Olmos, who considers reopening those margins as “one of the pending tasks” of collective bargaining.

Olmos points out that both employers and unions are aware of this reality and recalls that in the salary agreement agreed upon last year it was established that the salary tables “must be consistent with the professional classification established in the agreement.”. A coherence that is blurring.

One of the most recent examples can be seen in the new State Agreement on Sports Facilities and Gyms recently signed. The difference between the salary in the highest category and the minimum in tables (which coincides with the SMI) is now 26%, while the gap in the previous agreement was 38%.

The most extreme case of this phenomenon occurs in the agricultural sector, where half of the workers receive the minimum wage.. In the field, agreements are beginning to be seen with directly flat tables, that is, without differences by category.. This is the case, for example, of the agricultural agreement in the province of Córdoba, which covers 60,000 workers.

However, this perception that the pay gap in the different categories is narrowing is not shared at UGT. The confederal secretary of the union, Patricia Ruiz, maintains that the increases in the SMI “are undoubtedly serving to encourage the rest of the salaries”. “There has been a need to protect working people and to differentiate themselves from the lowest salaries. An employer cannot allow all categories to have the same salary,” he points out in conversation with this newspaper. Ruiz points out that 36% of the agreements have tables affected by the SMI.. “In these agreements, collective bargaining has to be reactivated and adapted to the differences in responsibility of categories.”