The employers affirm that fraud will grow after the rise in the minimum wage: "There will be more underground economy"
The president of the CEOE, Antonio Garamendi, has reacted this Friday to the increase in the minimum interprofessional wage (SMI) of 15 euros that the Government has agreed with the unions for the final stretch of the year. "With the one that is falling, the pandemic, it is a very delicate moment," he said, although the business leader has argued that the employers will be willing to negotiate an increase in three months, by the beginning of 2022. One of the balance sheets de Garamendi on the increase in the SMI is that "the underground economy will increase", so he assumes that there will be more fraud in hiring by employers.
The rise in the minimum wage in 2019 reduced inequality and poverty rates in the workplace
The Basque businessman, in an interview on Onda Cero, has reiterated the arguments that have led the CEOE to reject "at this time" an increase in the SMI and has warned of the consequences that its rise could have, such as the increase in the underground economy and the destruction of jobs.
"I think that we should not talk so much about the amount, if it is 15 euros, as about the final consequences. In the end there will be more underground economy, because there will be more underground economy. That will mean less taxes," he said Antonio Garamendi, who has also considered that although some jobs will be created, others "will disappear." Data from the latest Living Conditions Survey They point out that the year in which the SMI was raised by 22.3%, inequality was reduced and the risk of working poverty decreased.
The CEOE leader has also warned that employers of domestic workers, "domestic service" in his words, "will have to make an additional effort to keep it at home." Compliance with the minimum wage, which will lead to an increase in the hourly wage of this group of employees, Garamendi believes will result in fewer hours of work for female employees. "It is what is going to happen."
"Not at this time", but in three months yes
"Our position is that at this time no. At other times we have said yes to raising the SMI, but it has risen 30% in the last three years. With the one that is falling, the pandemic, is a very delicate moment", Garamendi has defended. But the business leader has been open to talking about the new increase for the beginning of the year, in just three months. "In January we will be in a different position, the worst hit sectors are opening little by little. We will see," he said.
The CEOE leader has rejected that businessmen have not negotiated, despite acknowledging that they have not moved from 'no' to a possible rise. But, in his opinion, the government could also be accused of not negotiating, because it has been adamant that it would approve any increase. However, the unions and the Executive did move from their initial positions during the negotiation, which finally concluded this Thursday with an agreement only with the workers' representatives.
The president of the employer's association has insisted that this increase has little to do with the companies of the Ibex 35 and yes with the very small companies, which make up the majority of the business fabric in Spain. He has given small farmers as an example, insisting that it will be difficult for them to implement this increase in the SMI after the 30% increase in recent years. "Practically all the collective agreements in the field are challenged by this 30% rise," he indicated.
Likewise, it has criticized the "paradox" that supposes that in the contracts that the public administrations award to the companies these increases of the minimum wage are not contemplated. "I summarize it in the phrase: I invite you to dinner, but you pay for dinner," said Garamendi, who added that in 12 of the 17 autonomous communities the goal of SMI exceeding 60% of salary is already met half.
Breakdown of bargaining between unions and employers
Along with a greater underground economy and the loss of jobs, Garamendi has warned that, in the medium term and "if this continues," in reference to continuing to increase the minimum wage, there is a risk that "the Government may decide wage increases "and this" could break collective bargaining in the future. " That is to say, the bilateral negotiation between unions and employers that is reflected in collective agreements and other agreements, such as that of salary increases for employees.
"I would like politicians, many of whom earn much more than the businessmen that I represent, in a couple of months to hire a person who collects the SMI and that they generate employment. Because billing in this country is not easy," he said. indicated.
The employer has expressed that the employers will continue negotiating at the social dialogue table with the Government and the unions, which have important measures and reforms ahead of them, such as the new extension of the ERTE and the labor and pension reform.