Podemos proposes minimum wage increase

The minimum wage in Spain has once again become the focus of fierce debate within the coalition PSOE / Unidas Podemos government, with calls on one side to raise it again in 2021 being met by pleas on the other side to keep it at 950 euros. 

The minimum wage (salario mínimo interprofesional or SMI) was raised by the government to 950 euros per month in February last year - a measure that affected over two million workers.

Employment Minister, Yolanda Díaz, now wants to increase it again, this time to 1.000 euros per month (in 14 payments) in 2021, a move that has brought criticism from other members of the Government, like the Minister for Economic Affairs, Nadia Calviño.

Trade unions have naturally voiced their support for the motion tabled by Pablo Iglesias's party, which would equate to a 5% wage increase.

However, other members of the government have underlined the major difficulties currently being faced by many businesses across the country and have expressed their desire to see the minimum wage frozen for the time being, or increased by no more than 0.9%, in line with the projected consumer price index rise.

The Podemos-controlled Employment Ministry led by Diaz, has distanced itself from and rejected this call for caution from prominent members of the government, and declared its "outright objection" to a freezing of the minimum salary.

On the other side, government ministers and business owners alike are arguing that now, in the middle of an economic crisis brought about by the coronavirus pandemic, is not the moment for such a rise, and that to ask small and medium-sized businesses to make such a considerable financial effort at this point could result in major job losses.

The Government has made no secret of the fact that achieving a minimum salary of 1,200 euros by the end of its legislature - bringing the country more in line with other EU nations like France, Germany Belgium and the Netherlands - is one of its immovable objectives.