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ARCHIVED - Minimum wage in Spain rises to 950 euros a month in 2020
The figure has increased by 29.1 per cent since 2018
The new coalition government of Spain was formed only a couple of weeks ago but already on Wednesday an important decision regarding the labour market and the economy was announced after trades unions and employers agreed that the minimum monthly wage in this country is to be increased from 900 to 950 euros.
The increase is retrospective and is applicable as of 1st January this year.
It is the stated intention of the PSOE-Unidas Podemos government to reach targets of at least 1,000 euros per month and 60 per cent of the average salary during this legislature, and that this step should have been taken just eight days after the first meeting of the new Cabinet represents something of a triumph for Yolanda Díaz, the Minister for Work and the Social Economy. On the one hand the unions were pushing for the figure to be increased to 1,000 euros immediately while on the other hand Cepyme (the confederation of small and medium-sized businesses) was opposed to any rise, but it appears that the both sides have been persuaded to give ground and reach a figure which is accepted by all.
In 2019 the minimum monthly wage was set at 900 euros following a dramatic rise of 22.3 per cent, and the additional 5.5 per cent now agreed upon indicates clearly the direction in which the coalition government intends to go in its labour market policy.
However, analysts consider this to be a risky decision. Inevitably the wage increase will decrease the willingness of small businesses to take on more staff and increase salary costs right through the structure of companies: if the lowest paid workers earn more, others will logically expect to benefit from increases too.
At the same time, it is now abundantly clear that unemployment is barely falling in Spain any more after six years of strong downward movement. During 2019 the number of people registered as unemployed fell by only 1.2 per cent to 3.16 million and there is an expectation that it will soon level out: by making it more expensive to employ low earners the government may bring that about sooner than would otherwise have been the case.
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