The advisory commission that the Ministry of Labor appointed in September to update the roadmap for raising the minimum interprofessional wage (SMI) has undertaken to raise it to a maximum of 1,082 euros next year. The proposal meets the objective of reaching at least 60% of the average salary before the end of the legislature but remains below the increase that pensions will experience, linked to inflation.
The Second Vice-President and Minister of Labor and Social Economy, Yolanda Díaz, and the coordinator of the commission, Inmaculada Cebrián, presented this Monday the second report of the commission, which marks the average full-time net salary at 1,856 euros for 2020, according to the latest available salary structure survey.
Experts recall that in 2020 the SMI should have been 1,035 euros. In this context, the commission has updated the figure to current circumstances and proposes a revaluation range of between 4.6% and 8.2%. Overall, the report marks four scenarios: 1,046, 1,054, 1,066 and 1,082 euros monthly, respectively, in fourteen installments. If the commission’s scenario is fulfilled, the minimum wage would be between 1,046 and 1,082 euros gross divided into 14 installments next year from the current 1,000 euros.
The committee asks to take into account two elements to decide: that the calculation of the SMI for 2023 was made taking as a reference the estimated median salary for 2022 and not that of 2023, “which can reasonably be expected to be higher”, and the significant price increase recorded throughout 2022 and its greatest impact on low-income groups.
In addition to the deduction of the SMI derived from the application of 60% to the four average salary estimates for 2022, the table includes the gross SMI resulting from the addition of social contributions by the worker (6.45% of the gross salary in 2023) and personal income tax levy depending on the type corresponding to the various estimated SMIs (with a minimum exemption of 15,000 euros per year by 2023).
The last work commission in the committee marked another requirement to be taken into account in the calculation. To the previous three keys – complying with the recommendation of the European Social Charter for it to reach at least 60% of the average salary, calculating the average net salary for 2022 and evaluating the impact of the increase – has been added a : take into account the level of inflation.
Without the CPI factor, the first report of the committee of experts for the progressive increases of the SMI recommended raising it to 1,049 euros for the last year of the legislature. Was June 2021 when the first roadmap for minimum wage increases is published. Then, prices rose at a 2.7% year-on-year pace and although they recorded their highest level in four years, they would remain well below the double-digit levels that would accumulate a year later. and the 6.8% set in November. . .
Slight reduction in employment growth
The commission’s analysis indicates that the rise in the SMI has been “helpful” in reducing inequality in Spain and the risk of poverty has decreased to 2.8%, benefiting 250,000 people in this situation, 121,000 of whom are under 30 years old. In this sense, the increase in the SMI would have had a significant effect in terms of reducing wage and income inequality by increasing the incomes of low-wage workers who, for the most part, are in the lower rent deciles”.
According to the report prepared by the commission, the increase experienced by the SMI “does not seem to have produced a significant effect on employment, having produced, at most, a slight reduction in its growth”. Thus, the commission assumes a slight share of the criticism of SMI increases due to the deterioration of the labor market while Díaz insists that it is the best tool “against working-class poverty and the gap between gender”.
The study recalls that the Bank of Spain has estimated a relatively low elasticity (understood as sensitivity) of employment growth for each point of rise in the SMI, ranging between -0.03% and -0.05% of total employment, which is significantly higher than that estimated by AIReF between -0.006 and -0.01%. “This would mean a decline in employment growth between 94,000 and 173,000 in the first case, and between 19,000 and 33,000 jobs in the second,” says the report, which affects the many events that simultaneously affect to job creation and which reinforces the position that there are many more people who benefit than those who are negatively affected by increases in the SMI.
The current uncertainty prompts the committee to propose a review of the increase at six months assess whether the increase “holds” the level of inflation or whether it is insufficient. The minister acknowledged that she was considering conducting a review if the proposal varied.
More, less or as much as pensions? next wednesday meeting
The new calculations respect the promise of the previous legislature to increase the amount of the SMI to 60% of the average net salary. However, the proposed maximum increase remains below the 8.5% increase that contributory pensions will register in 2023, linked to the consumer price index (CPI).
Is Work that has the last word; The technical report is not binding and will now go to the social dialogue, which the ministry will convene next Wednesday to hear their demands before taking the final decision. As the Vice-President answered questions from journalists after the presentation of the report, she cannot confirm that the measure will be approved during the two Councils of Ministers which will take place in the last week of the year (Tuesday and Thursday, the latter of an extraordinary character). In any case, he confirmed that if he continues well in 2023, he will have retroactive from January.
From the department of Díaz, they have previously shown themselves in favor of a revaluation of the minimum wage with inflation to avoid the loss of purchasing power of the lowest incomes. The vice president has ruled out dragging her portfolio position before the negotiating table.
For the trade unions, this maximum possibility of the consultative committee is also insufficient and they opt for raise it to 1,100 euros next year, 10% more to compensate To hack from inflation to pockets. Employers, for their part, have already expressed their opposition to a further rise in the minimum wage and have since last week broken off dialogue with Labor after the government accepted an amendment by EH Bildu which gives control to the Inspectorate. Labor Records Employment Regulations (ERE). On this issue, Díaz urged the CEOE to fulfill its mandate, which is to protect the interests of businessmen: “Let them do the best they can and know how. If someone does not go to the table on Wednesday, he will have to explain to them the Spaniards, the workers and the companies who are suffering from inflation”.
The SMI was last raised in February this year, after an agreement between the government and the unions by which the minimum wage was raised to 1,000 euros in 14 installments with the rejection of the CEOE. The path to the current 1,000 euros started in 2019. The coalition government increased the SMI by 22% to 900 euros that year to add another 5.5% in 2020 to 950 euros and 1.57% to 965 euros in 2020. The last revaluation, by 3.6% , it was this year that it hit four figures for the first time.