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WORKING IN SPAIN

CONFIRMED: Spain to raise minimum wage to €1,000

Despite opposition from companies and business associations, Spain’s left-wing coalition government has confirmed that the country's minimum wage will be increased up to €1,000 gross over 14 payments, applicable from January 2022. 

spain minimum wage
It's the second minimum wage increase in the last six months in Spain. Photo: Jaime Reina/AFP

Spain’s Labour Minister Yolanda Díaz on Wednesday announced that the Spanish Cabinet will approve an increase of the country’s minimum wage up to €1,000 at their next meeting on February 22nd.

This represents a €35 increase from the current minimum wage of €965. On Tuesday, trade union UGT disclosed the suggested rise would be €31, but Díaz has decided it should be €4 higher to reach a round number of €1,000.

This is a gross figure (pre-tax) which minimum wage full-time workers will receive over 14 payments as is standard in Spain, with an extra payments during the summer and another at Christmas (pagas extras) rather than 12 (one for every month).

 It will also apply retroactively from January 2022, meaning minimum wagers will be paid an extra €35 for work carried out last month as well as this one.

Spain’s government has pushed through the 3.6 percent minimum wage rise thanks to the support of trade unions CCOO and UGT, and despite not receiving the green light during negotiations from business associations CEIE and Cepyme, which have said the move responds more to “political aspirations than financial common sense”. 

Last September, the Spanish government already approved a €15 rise in el salario mínimo from €950 to €965, a bill which was also spearheaded by Yolanda Díaz and which business associations rejected as unfeasible and detrimental to job creation.

“This government fulfils its promises,” Díaz said during a press conference on Wednesday. 

“Despite everything that’s been said, raising the minimum wage has been very positive for our country and our economy.”

According to the Unidas Podemos politician and second Deputy Prime Minister, it’s “science fiction” to argue otherwise because it’s been “empirically” proven that raising wages encourages people to spend more and this in turn helps the economy.

“We are committed to having a work model that’s not based on low wages, competing like this equates to defending a bad economy, precarious businesses and a social model that is profoundly unfair”.

The government’s objective is that by the end of 2023, Spain’s minimum wage will represent around 60 percent of the average salary in the country.

This latest increase will benefits more than 1.8 million workers in Spain, according to the labour ministry, both full-time and part-time workers.

However, the previous rise in minimum wages resulted in the increase of €8 in social security contributions for the country’s self-employed workers up to €294 a month, a figure that could increase further still for many under new plans to raise rates based on real earnings.  

Even though job insecurity and unemployment remain relatively high in Spain, the country already has the seventh highest minimum wage rate in the EU.

Last Thursday, the Spanish government managed to pass a long-awaited labour reform aimed at ending rampant job insecurity with a majority of just one, but it quickly emerged that a PP deputy accidentally voted for the legislation and in doing so tipped the balance in favour of the government.

This will also lead to a salary increase for some 73,000 workers in Spain who belong to multi-service companies that offer cleaning, gardening, maintenance and other services.

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WORKING IN SPAIN

‘Spain must invest in Spaniards rather than turning to migrants’: EU work chief

The European Commission’s head for jobs and social rights has said Spain “must first find a solution for young people, women and the elderly” with regard to its labour market and “see later if they need immigrants”.

'Spain must invest in Spaniards rather than turning to migrants': EU work chief

The European Commissioner for Jobs and Social Rights Nicolas Schmit recently took part in a summit on job security in Bilbao, where he spoke with Spain’s Labour Minister and Second Deputy Prime Ministers Yolanda Díaz about the state of affairs for workers in the country. 

When discussing potential solutions to Spain’s high unemployment rate, Schmit explained “I would not exclude immigration, but when I analyse the data, I see youth unemployment of 30 percent, more than double the European average”.  

“The priority for Spain must be to invest in its people,” Schmit continued.

“They must first look at their labour market and find a solution for young people, women and the elderly. They will see later if they need immigrants”.

Despite high unemployment levels which currently amount to three million people, Spain has worker shortages in a wide variety of sectors. 

READ ALSO: The ‘Big Quit’ hits Spain despite high unemployment and huge job vacancies

The Spanish government recently changed its immigration laws to make it easier for employers to hire non-EU citizens for sectors with shortages, from waiters to plumbers, whereas previously recruiters were required to prove that they couldn’t find an EU candidate for the job and the skills shortage list was limited and outdated. 

READ MORE: How spain is making it easier for foreigners to work in Spain

In 2023, Spain’s Ministry of Inclusion, Social Security and Migration wants to hire 62,000 third-country workers to cover an array of construction and trades jobs, something the country’s Labour Ministry has not agreed to yet. 

READ ALSO – EXPLAINED: Spain’s plans to recruit thousands of foreigners for construction and trade jobs

The government also recently passed its new startups law to attract foreign investors, digital nomads and talent to the country.

Could Spaniards not be trained to do these jobs as Schmit alludes to? Currently, low wages and unstable working conditions are dissuading many locally trained professionals from staying.

This includes almost 20,000 doctors who have moved abroad in recent years as salaries in other European countries are significantly higher than in Spain, with a newly qualified doctor’s salary only around €1,600 gross per month.

Staff shortages in the health sector are not helped by the fact that foreigners with non-EU qualifications wait for several years for their qualifications to be recognised in Spain through an unnecessarily laborious administrative process known as homologación. This applies to a number of regulated fields, from engineering to dentistry, all of which face shortages. 

READ MORE: How Spain is ruining the careers of thousands of qualified foreigners

Spain’s Socialist-led government has partly addressed some of its labour market issues by reducing the rate of temporary contracts and increasing the minimum wage (SMI), but voices within the opposition have accused Sánchez’s administration of “dressing up” the dire reality.

When asked about the rise in minimum wage, Schmit said that he believes “it will not mean significant changes for Spain, which already has a tradition of updating the minimum wage on a regular basis… but the government must take into account factors such as the cost of living and the economic context”.

“Spain must question whether the SMI allows for a decent life or creates poor workers. Its economy cannot be supported by low wages and low productivity,” he continued.  

When asked if salaries and inflation have to go hand in hand, Schmit argued “wages must be set by collective bargaining. We are experiencing very high inflation because of the explosion in energy and food prices. If there is a large lag between wages and inflation, there will be an impact on demand and the risk of recession will increase”.

With regards to pensions, Schmit explained: “I don’t think that pensions are very high in Spain and if you leave a gap between the rise in benefits and inflation, you can create a situation of poverty among the elderly. Spain has a disadvantage in that it has one of the fastest-ageing societies… The solution is to modernise the economy to make it more productive and attract more people to the job market”.  

Despite these issues, the commissioner acknowledged that the Spanish labour market has surprised many with its resistance this year. “Employment will remain strong if there is no deep recession,” he said.  

“The national plan for access to European funds has a good combination of measures to invest in green energy, digitisation, education and public employment services… Spain experienced its economic miracle due to the real estate boom, which exploded, and now it has to transform to go in the right direction”.

According to a report carried out by human resources company Hays on work trends in Spain in 2022, 77 percent of Spaniards surveyed said they would change jobs if they could. Furthermore, 68 percent of them confessed that they are actively looking for another job and the main reason they argue is to get a better salary. 

According to Eurostat data from January 2021, 37 percent of Spain’s workforce is overqualified, 17 percent higher than the EU average.

READ ALSO: Why more people than ever in Spain are overqualified for their jobs

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