Spain to raise minimum wage to €1,500 per month

Spain’s Ministry of Labour decided on the new minimum wage after negotiating with unions, a rise which will enter into force in 2027 if approved promptly by the Spanish Cabinet. 

This minimum wage — known as Salario Mínimo Interprofesional (SMI) in Spain — will rise by 5.3 percent, according to the text published late on Wednesday by the Ministry of Labour.

This would bring the minimum wage to €1,286 gross per month, paid in 14 instalments as is common in Spain, or €18,004 per year.

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This represents a monthly increase of €65 on the current SMI of €1,221 a month (14 payments).

When looking at the figures as 12 payments a year rather than 14, the new minimum wage in Spain would be €1,500 gross per month.

The minimum wage rise also exceeds a proposal put forward by the committee of experts which suggested an increase of 4.9 percent – or €60 – in line with October’s year-on-year inflation rate.

If the polls are correct and the ruling Socialists (PSOE) lose the election, it will constitute the last rise from the leftist government, which has also upped pensions.

The deadline for submitting amendments to the draft ends on November 16th, meaning that, in principle, the government could approve the minimum wage at the Spanish Cabinet meeting on November 17th or on November 24th – the two remaining meetings before the general election on November 29th. 

Crucially, minimum wage adjustments don’t require approval by the Spanish Parliament, which means right-wing parties will not be able to vote against the SMI rise.

The ministry headed by Yolanda Díaz is speeding up the process because it wants the increase to be finalised before the election, so that it is not left to the whims of a caretaker government or the next government.

The 5.3 percent figure, however, falls well short of the 7 percent rise trade unions have demanded, a position from which the UGT and CCOO have no intention of backing down. 

“We will stand firm on our demand for a 7 percent increase. The government has its report and will have to decide whether there will ultimately be an increase in the minimum wage before the elections, whether it will accept that report or whether it will yield to the trade unions’ positions,” said CCOO general secretary, Unai Sordo, on Wednesday.

With this potential increase, the Sánchez government will have raised the minimum wage by 74 percent since 2018, when it took office, from €736 to €1,281 (14 salary payments). 

Over that period, prices have risen by around 28 percent, meaning that the minimum wage has seen a gain in purchasing power of more than 40 percent.