April 14, 2021

The Bank of Spain calculates that the rise of the SMI will destroy 125,000 jobs

The Bank of Spain calculates that the rise of the SMI will destroy 125,000 jobs


MadridUpdated:

The Bank of Spain calculates that the rise in the minimum interprofessional salary (SMI) to 900 euros by 2019 could mean the loss of 125,000 jobs, 0.8% of the 16 million full-time employed in the labor market.

According to one document, the banking supervisor extrapolates to 2019 the impact on the labor market of the increase in the SMI of 2017 (by 8% to 707.6 euros), which entails "a high degree of uncertainty".

Thus, he concludes that 12.7% of the workers affected by the rise of 22.3% of the SMI for 2019 will lose their jobs, that is, whose salariesand they found below 900 euros, which only constitute 6.2% of the total salaried employees full time.

The rise of the SMI, according to the Bank of Spain, will destroy 28% of the jobs of the employees of between 45 and 64 years earning less than 900 euros, a rate that is reduced to 15.9% for those between 33 and 44 years old, to 1.6% for those between 25 and 32 years old, and to 2.2% for younger people.

It also explains that the higher wages of those who kept their jobs would be compensated, approximately, with the wages lost for workers who lost their jobs, so that the total wage bill would remain "without appreciable changes".

This would imply "a certain increase in the degree of inequality of the distribution of labor income "among different groups of workers, which would mean a 0.2% increase in the Gini index, which measures persistent inequality.

The average salary per worker will rise by 0.8%, an increase that will be higher among the youngest, from 16 to 24 years old (3%), and will remain below 1% for the rest.

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