The expert committee on the minimum wage proposes that it be raised to 1,049 euros per month in 2023

Achieve a minimum interprofessional salary (SMI) in Spain of between 1,011 and 1,049 euros per month to comply with the European recommendation. It is the conclusion of the committee of experts created by the Ministry of Labor to define the goal in Spain of 60% of the average salary to which the Government has committed to bring the SMI at the end of the legislature, in the year 2023 , in order to adapt to what Europe proposes. The advisory commission also collects its proposals for the upward path for the next three years, from the current 950 euros per month, which was the second of its assignments. It raises different increases in this period, with an increase already in 2021 even in the most “prudent” scenario due to the pandemic, which goes from 1.3% to 2%. However, specialists recall that the Government is the one who must decide and point out that there is an “alternative” to concentrate the increase more in 2022 and 2023, although they do not specify it.

When the ‘second round’ has been unleashed in the coalition Executive in the battle over whether or not to raise the SMI this year, the advisory commission created by the Ministry of Labor has concluded its task of defining the goal that the SMI should approach in order to reach the goal of 60% of the average salary and, secondly, what recommendations it proposes to approach that figure.

The Third Vice President and Minister of Labor, Yolanda Díaz, has celebrated that the debate on the SMI is based on “scientific evidence”, for which she has announced that she will maintain this commission of specialists during her mandate. Díaz has announced that he will meet soon with the President of the Government, Pedro Sánchez, to address the increase in the SMI in 2021. He will negotiate this issue directly with the President of the Government and not with the economic vice president, he pointed out.

Increases in 2021, even in the prudence scenario

Experts lean in their two scenarios quantified in the study by the rise in 2021, whether of greater or lesser depth. Even so, they remember that it is the Executive that must decide and “another alternative discussed within the commission is that it should be agreed, given the economic and social crisis caused by the pandemic and the uncertainty that it has brought with it, to further concentrate the increases in the SMI in 2022 and 2023 “.

The economist Inmaculada Cebrián López, rapporteur for the commission of experts, has been in charge of explaining the proposed rise path. In their most “prudent” approach given the current pandemic situation, specialists suggest increases in the SMI in the three years, 2021, 2022 and 2023, but they choose to delay “the main part of the increase” for the last two years given the current “uncertainty”. The increase in the SMI proposed for 2021 varies between 1.3% and 2% in this more “prudent” scenario.

The report also quantifies another table of proposed increases, based on GDP growth forecasts for the next three years, which in 2021 is 6.5%. This proposal focuses the largest increases in the SMI in 2021, with a greater increase compared to 2022 and 2023. Here, the increases proposed for 2021 range from 2.5% to 4%.

The committee of experts refers to the report of the Bank of Spain, which evaluated the negative effect on employment of the increase in the SMI of 22% in 2019. Inmaculada Cebrián López has highlighted that the analysis of the Bank of Spain has served the working group and “fits perfectly” with the proposal to raise the minimum wage of her study. Cebrián López recalled that the impact on employment is only one of the factors to take into account when deciding to raise the SMI, but that other variables are also important, such as the reduction in poverty and the effect in favor of the equality, as women receive the lowest wages.

“The available evidence seems to indicate that the sensitivity of employment to increases in the minimum wage is relatively low,” notes the study, “but it is expected that there will be a wage level (medium or medium) from which this sensitivity increases, making less This tool is effective as a mechanism to increase the wage bill of low-wage workers. ”

The twelve specialists also recall that, together with the short-term impact on employment of the rise in the SMI analyzed by the Bank of Spain and AIReF, “in the medium term a second-round effect can be expected that would increase employment and the collective of beneficiaries of the minimum wage “, due to the increase in income of workers with lower salaries, which usually results in an increase in their consumption and, therefore, in economic demand.

The debate is open in the Executive, which froze the SMI at the beginning of 2021 due to the COVID crisis, as defended by the economic vice president Nadia Calviño and against the criteria of the Minister of Labor, Yolanda Díaz. The government said that in the middle of the year they would re-analyze the situation. Come June, the positions between Calviño and Díaz remain the same. The Prime Minister, who will tip the balance again one way or another, This week the possibility of a rise in 2021 has cooled down the same arguments used by the economic vice president.

Minimum salary of up to 1,049 euros per month

The first mission of the commission was to determine what is 60% of the average salary. An objective that may seem simple, but that it is not so much for several reasons. Among them, the great disparity of statistics that measure wages in Spain and the alteration that the coronavirus crisis implies in 2020. After an analysis of the different statistical sources, their pros and cons, the report opts for the Annual Structure Survey Salary (EES), which has the latest official data from 2018.

With this starting point, the specialists make a projection to update the average salary in 2020 based on three scenarios: depending on whether it is considered that in 2020 average salaries do not vary, they increase like the salary of public employees and pensions at the beginning of the following year or that increase according to the information collected by the statistics of collective agreements.

From the current SMI of 950 euros per month in 14 payments, the objective of 60% of the average salary in Spain is thus 1,011 gross euros per month in the scenario in which wages in Spain do not rise in 2020 and 1,049 gross euros per month in the scenario of the highest salary increase. Therefore, in the next three years an increase in the SMI from 61 to 99 euros per month in absolute terms would have to be reflected.


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