August 2, 2021

Raising the minimum wage is not safe, leaves victims


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Two years after the Government of Sánchez raised the Minimum Interprofessional Salary (SMI) by 22%, to go from 735.9 to 900 euros, we have seen the report of the Bank of Spain that shows that, as many of us feared, the decision was not innocuous and left many victims along the way. Logically, the 1.4 million workers who received the minimum wage, or who earned less than 900 euros, saw their purchasing power increased to a greater or lesser extent. But there were thousands of jobs that were ceased to be created as a direct consequence of this increase. Specifically, according to the body led by Pablo Hernández de Cos, the rise in the SMI reduced between 0.6 and 1.1 percentage points from job creation that year, with special incidence among young people and those over 45 years of age. Or what is the same, they stopped creating up to 180,000 jobs due to that increase in the minimum wage.

The increase in labor costs led some employers, especially in the agriculture sector, or families who were thinking of taking on a domestic worker or a caregiver for their elders to consider it, or directly not to hire or do it in the dark, because the available budget did not give them more. There are figures that are very illustrative. In 2019, the year in which the increase in the minimum wage was registered, there were two sectors that registered a drop in Social Security affiliation: the special systems of the Home and the Agrarian. Some 13,000 jobs were destroyed among domestic workers and more than 4,400 in agriculture.

Despite these figures, some members of the Government, and, specifically, the Third Vice President and Minister of Labor, Yolanda Diaz, insists that we must continue with the process of raising the minimum wage to 950 euros. A rise that has already been stopped by his cabinet mate, the second vice president and minister of Economy, Nadia calviño, last January. Yolanda Díaz even thanked the Bank of Spain for its work in the face of criticism it received from other areas, such as the unions. The UGT asked the supervisory body to “focus on its functions”, arguing that the estimates that link the increase in the minimum wage with the loss of employment sow “confusion in the public debate.” Nothing could be further from reality. The best way to make decisions is by knowing the consequences they have. We cannot, or must not, tell the Bank of Spain or any other body that it does not study the measures that the Government has approved, or rather, that it does not make its conclusions public, because I do not like them or they do not suit what I do. I want to do.

And although it rains in the wet – the unions have on many occasions criticized different governors of the Bank of Spain when they warned about the need to reform the labor market -, it is still curious that the same week that they, representatives of the workers, were They get into politics, showing themselves in favor of pardons, which they will tell me what that has to do with their task of defending the rights of employees, ask the governor to shut his mouth. Anyway, it would be better for them to apply their own medicine and dedicate themselves to fighting to improve the situation of workers. And raising the minimum wage, no matter how hard they try, makes sense in measure and depending on the situation of the labor market and other wages. But neither the unions nor the Labor Minister can forget the pernicious effects of another excessive increase in the SMI.

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