Yolanda Díaz proposes raising the minimum wage to at least 1,120 euros per month

Yolanda Díaz believes that the minimum wage should rise above inflation so that workers do not lose purchasing power. The increase in the SMI would have to be, therefore, above the 3.7-3.8% that the accumulated price increase until November is expected to reach, said the second vice president and Minister of Labor this Thursday.. This approach would imply bringing the legal minimum remuneration to at least 1,120 gross euros per month in 14 payments compared to the current 1,080, which would represent an increase of 40 euros per month.

This was expressed by the second vice president of the Government at an event held this Thursday to defend equality among Roma women.. “There is no better tool for equality than raising the SMI,” said Díaz, who has announced that he will call on unions and employers “immediately” to undertake an “immediate” increase in the SMI “in the face of an unprecedented inflation crisis.”. “There is no better feminist policy or better tool for job insecurity and poverty,” he added.

With this proposal, the vice president picks up the gauntlet that the employers threw at her on Wednesday. Businessmen presented an unexpected proposal to raise the SMI by 3% in 2023 and 2024. An approach that would take the minimum wage to 1,112 euros in 2024 and up to 1,146 euros in 2025 with the possibility of reinforcing these increases by an additional percentage point each year if inflation remains high. The idea of the employers is to apply to the SMI the same criteria that were agreed with the unions in May to negotiate wage increases by agreement in the V AENC.

Once the positions of Labor and employers are known, it is still pending to know what the final proposal of the unions will be.. UGT and CC OO have rejected this afternoon the employer's approach, which they consider “insufficient”, but they have not gotten involved with any figures. Through a joint statement, the two large union centers have demanded that the increase in the SMI be in line with raising this income to 60% of the average salary and that it also take into account the increase in the prices of basic products, particularly the food.

Although the three parties will sit at the negotiating table in the coming days, the Government as a whole will have the last word.. The Workers' Statute states that the increase in the SMI is the responsibility of the Executive, which must first consult the most representative unions and business associations for their opinion.

The last time the Government raised the minimum wage was in February of this year, when it raised it from 1,000 gross euros per month in 14 payments to the current 1,080.. An 8% increase that was approved in a context of high inflation and without the agreement of the employers' association, which refused to sit at the negotiating table considering that the Executive had not taken them into account in the process.

The minimum wage has risen 47% since Pedro Sánchez took over the presidency of the Government in 2018. However, consumer prices have eroded part of the purchasing power that SMI recipients have gained in recent years.. In fact, the last two increases in the minimum wage – those that took it from 965 to 1,000 and from 1,000 to 1,080 – have been completely neutralized by inflation. Since 2021, the SMI has risen 12%, practically the same as consumer prices. In practice, those who earn the minimum wage have not gained purchasing power since 2021.

The difficulty of predicting the average salary

The delay and variety of salary statistics make it impossible to know what the real average salary is for the current year when deciding on the SMI. The different sources (INE, Tax Agency, Social Security) provide figures that vary significantly. At the moment, the most recent average salary data is that published by the Tax Agency, which places this income at 29,247 euros gross per year.

Here we must take into account that when dealing with tax sources, there is an upward bias in the figure given that lower incomes tend to file less personal income tax return.. With this figure in hand, the SMI should rise to 1,253 euros in 14 payments to reach 60% of the average salary. This would imply an increase of 16%, far from the figures that have been put on the table until now.

At this point, some experts and organizations warn that the next increases in the minimum wage must be calculated carefully. This is the case of the OECD, which recently recommended that the Government link the following increases in the SMI to the conditions of the labor market and the productivity of the Spanish economy. “The minimum wage has risen considerably since 2018, which has increased incomes and reduced wage inequality among young people. However, such large increases can harm employment in some groups, especially young people,” the agency said.