Labour Minister Yolanda Diaz

Labour Minister Yolanda Diaz.


Spain's new government yesterday announced a 5.5% rise in the minimum wage retroactive to January 1, the third major economic initiative the left-wing coalition has announced since taking office this month.

The government's move is part of a plan to boost the net minimum wage to 60% of the average monthly pay packet of 1,944 euros ($2,154.92) by the end of its four-year term.

"I want to announce that we are a strong government, that we are heeding the mandate of a social majority that wants us to move forward," Labour Minister Yolanda Diaz said after meeting with business and union representatives.

She said the rise in minimum wage to 1,108 euros per month was a "small tool" for tackling inequality. Spain's Labour Ministry said it would affect more than 2 million people.

The new government has also announced rises in pensions and civil servant salaries.
Prime Minister Pedro Sanchez decreed a 22 percent increase in the minimum wage in late 2018. The biggest jump since 1977, it catapulted Spain from having one of Europe's lowest minimum wages, relative to the average wage, to one of the highest.

Business leaders were unhappy with yesterday's announcement while unions welcomed it.
BBVA bank said minimum wage hikes so far had a "limited" beneficial impact while slowing job creation. It said increases had cost a potential 45,000 jobs in Spain's least developed regions such as Andalusia and the Canary Islands.

The government and unions maintained that wage hikes have not hurt employment.
"The minimum wage has not destroyed employment in Spain. And the rise in salaries is going to contribute to creating more jobs in Spain," said CCOO union chief Unai Sordo.

After the press conference, Labour Minister Diaz said she had long been working "secretively" with the social partners. She said all parties had "given up something» but "we are all very happy" with the agreement.

The government is also expected to deliver on a promise to roll back parts of a 2012 labour reform that made it easier for companies to fire workers and drove down wages.
Diaz said the government planned to roll back the reform in two phases, and the first would be done "very quickly".

Some of the government's major priorities in rolling back the reform include securing a shift back towards sector-wide collective bargaining agreements and away from individual company deals, and preventing companies from firing employees because of illness-related absence for a certain period of time.


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Richard / Hace over 2 years

Employ more staff ? I know of two people who are going to wait until the last moment to employ anybody for the new season and are thinking about putting current staff on reduced hours.


MelB / Hace over 2 years

Bob, I would go even further. This is a politician, so by definition someone who has NEVER worked.


Bob / Hace over 2 years

Here are the real figures. 2018 salary 736 x 14 ( 2 extra months bonus ) plus social charges is 1133 per month. 2020 salary 950 x 14 plus social charges is 1463 per month. A lot of small businesses who can’t increase prices will think twice about employing extra staff. This is one of the reasons Spain has Europe’s highest youth unemployment rate and this won’t improve it. But try telling that to someone who has never worked in the private sector in her whole life.