The minimum wage will go up 15 euros a month from this September. Now, the Government has reached an agreement with the majority unions to increase the SMI to 965 euros per month in 14 payments. The increase in the lowest wages will be approved without the backing of the employers’ associations, who have completely refused any increase in 2021. Once the tensions in the government coalition on this issue, which have existed until the last moment, have been overcome, The Executive will give the green light to the rise for the last four months of the year, with retroactive effects from September 1.
The committee of experts proposes an increase in the minimum wage of between 1.3% and 2% in 2021 in full debate in the Government
This Thursday has been convulsive. The day began with the news from Cadena Ser that the agreement between the Ministry of Labor and the unions to raise the minimum wage was taken for granted, which was later denied in a press conference by the CCOO leader, Unai Sordo. Sources from the Ministry of Labor also explained that there was still no pact on the matter, although it was trying to finalize.
What was missing? The Executive had already resolved its internal differences on the amount of the increase, of 15 euros, after a negotiation between the increase defended by Vice President Nadia Calviño (12 euros) and the one proposed by the Ministry of Labor, higher and than in the Last days it was at those 15 euros. This was an increase corresponding to the intermediate path recommended by the committee of experts to the Government on the way to bringing the SMI to 60% of the median salary at the end of the legislature, a compromise of the coalition agreement. The group of specialists developed several rise scenarios, with a range of 12 euros to 19 euros per month.
But those 15 euros were not enough to reach a pact with the unions. Once the businessmen were anchored to the ‘no’ to any increase, no matter how small, CCOO and UGT demanded from the Executive that the increase in the minimum wage for the remainder of 2021 be accompanied by a commitment to place it at 1,000 euros in 2022. In recent days, this has been the main stumbling block, what commitment to set up for 2022 to be able to join the unions to the agreement without leaving employers out of this decision, which is traditionally negotiated in December.
The “fringe” of 2022 has continued to kick in until this Thursday and throughout the day. In this debate, the differences within the Executive have come to light again. While Labor and the unions agreed to state in writing that the Government promised to raise the SMI in 2022 in line with the recommendation of the committee of experts, this text did not go ahead pending the green light of the part socialist.
One of the first internal fights of the course
The increase in the SMI has been, together with the increase in the price of electricity, the first great battle of the coalition this quarter. What seemed like an expeditious path given Pedro Sánchez’s order to upload it “immediately”, which made it clear as soon as the political course began in his address to unions and a large representation of the Ibex-35, the Government has been choked more than expected.
The socialist part of the cabinet imposed itself on the Minister of Labor, Yolanda Díaz, at the beginning of 2021 in the decision to freeze the minimum wage at 950 euros under the premise of waiting for the evolution of the economy. But the message that Moncloa now transmits is that the data now accompany a recovery that strives to ensure that it will be “fair” and will reach the whole of society. A radically different approach from the financial crisis of 2008 with the PP in power. That is why one of the first decisions that Sánchez wanted to adopt this course in that direction was to raise the lowest salaries, which is a prerogative that falls to the Executive.
The “desire” was to raise the SMI within the framework of social dialogue, as the Government has been achieving with most of the labor measures it has taken and shows numerous photos with the unions and, above all, the employers at their side. But the Executive assumed that this time it would not be so easy. Some consulted governmental sources assure that the industralists are under important political pressure. That is why the decision on this occasion was to increase the SMI with or without the agreement of the employer.
The tug of war in this matter has been going on for months and, more focused on the details, since Sánchez himself delivered his speech on September 1. After the event at the Casa de América, the Second Vice President and Minister of Labor, Yolanda Díaz, already discussed the matter with the Minister of the Presidency, Félix Bolaños, who is in charge of coordinating the actions of the Government. The issues that have alienated the two coalition partners in recent weeks have been the SMI and the measures to stop the growth in the price of electricity. The second is resolved at least for now with the shock plan approved in the Council of Ministers this Tuesday with which they intend to cut the “benefits fallen from the sky” of the electricity companies.
The SMI first festered within the government. Once the socialist part of the Government agreed to raise the minimum wage in the final stretch of the year, the economic vice president, Nadia Calviño, wanted the increase to occur in the lower part of the range raised in the experts’ report. The study establishes the guideline that the SMI must follow in order to reach 60% of the average salary at the end of the legislature, which is the commitment of the coalition. Calviño’s proposal was to raise twelve euros in 2021, the minimum raised by the specialists, and also that it take effect from the month of October. Not September, as the Ministry of Labor was raising at the social dialogue table.
But Yolanda Díaz was planted when she considered it insufficient. His proposal was a rise of 15 euros on September 1 – although the decree is after that date – but he left the ball on the roof of Pedro Sánchez due to the lack of understanding between the economic areas of the Executive. The unions, for their part, demanded an increase of between 25 and 30 euros for this year and, if lower, that there would be a commitment for the increases in the coming years.