The history of the minimum wage in Spain



In the last days the rise of the minimum interprofessional wage (SMI) has been on everyone’s lips. The Minister of Labor, Yolanda Diaz, on Thursday, September 16, proposed to the unions a new increase of 15 euros per month and retroactive (from the month of September). Thus, at 9:00 p.m., the Ministry of Labor announced that an agreement had been reached and that, therefore, the SMI would reach the 965 euros per month in 14 payments.

This will be the first increase in the minimum wage received by workers in Spain since the coalition government, formed by PSOE and United We Can, carried out an increase of 5.5%, reaching 950 euros per month in 14 payments or 1,108 euros per month in 12 payments. A measure that occurred just one year after it was approved to raise the minimum salary by 22.3%, until reaching the 900 euros per month in 14 pays.

Thus, the central Executive intends to fulfill one of the objectives of the coalition agreement: to place the SMI in the 60% of the country’s median salary, as proposed by both the European Social Charter and the President of the Commission, Ursula von der Leyen.

Despite the fact that in recent years the minimum salary It has taken a leading role in social and political today, the truth is that its history is much broader. In Spain a minimum wage was established 57 years ago. Its amounts have undergone great changes, adapting to the economic and social conditions of the country.

1963: the first minimum wage is established

After implantation by collective bargaining law In 1958, the first interprofessional minimum wage in Spain was set in January 1963, during the Franco regime, and was 1,800 pesetas per month, which would be equivalent to about 10.8 euros.

In 1967 the authorities decided to start raising it annually to avoid loss of value. Thus, that year the SMI experienced an increase of 39.8%, reaching 2,500 pesetas, about 15 euros per month, and in the following years the increases were more gradual. Thus, the SMI in 1968 was established at 2,875 pesetas, about 17.30 euros per month; in 1969 the amount amounted to 3,060 pesetas (18.40 euros) and in 1970 it reached 3,600 pesetas, around 21.60 euros per month.

This progressive improvement in lower salaries is explained by the establishment of the industry in the country and by the developmental policies that began to take place during the Franco regime, which aimed to reactivate the economy after the autarky period, which lasted until 1959.

SMI triples during transition

During the last years of the Franco regime, the interprofessional minimum wage continued to rise and in 1975 it reached five times the value established in 1966, reaching 8,400 pesetas per month (50.5 euros). However, these increases were insufficient and did not manage to stop the social protests organized by the unions in hiding.

Finally, after Franco’s death, a process of political opening and normalization of relations between employers and unions began to take place. UGT and CO.OO. take weight, calling the first general strike. Thus, between 1975 and 1981, the minimum wage grows by almost 205% and, during the government of Leopoldo Calvo-Sotelo (UCD), successor of Adolfo Suárez, the SMI was established at 25,625 pesetas (153.98 euros).

From this moment on, the increase in the minimum wage slows down, although not completely, and continues to experience increases in the following five years, which accompany the increase in prices in the country.

Slow growth

With the entry into the European Economic Community, the Spanish minimum wage suffers a stagnation that lasts until approximately 1992. Between 1993 and 1997, the economic crises almost completely freeze the evolution of the SMI, which was four times lower than the national average wage.

From 1998 to 2004 there was an increase of just 12.62%, reaching 460.5 euros. In February 2002, Spain faced the launch of the eurozone and changes from the peseta to the European currency, which represents a loss of purchasing power which also affects the evolution of the SMI.

During the legislature of Rodriguez Zapatero, the minimum wage goes from 513 euros per month in 2005 to 600 euros in 2008 and, in the midst of the economic crisis, between 2009 and 2016, the SMI barely rose by 5%. This last year the minimum wage reached 655.2 euros. It should be noted that between 2012 and 2014 it did not suffer any variation.

In 2017, during the legislature of Mariano Rajoy, the biggest rise in SMI in a long time, of 8%, up to 707.7 euros per month, and an additional 4% the following year, reaching 735.9 euros. This is so thanks to the agreement between the PP Government and the general secretaries of CO.OO. and UGT, Unai Sordo and Pepe Álvarez, and the presidents of CEOE, Joan Rosell, and Cepyme, Antonio Garamendi, through which they pledged to increase the SMI to 850 euros in 2020 as long as GDP rose by 2.5% .

The agreement would end on deaf ears after the motion of censure that would lead the socialist Pedro Sánchez to the presidency.

With everything, since 2016 the SMI has experienced a cumulative rise of almost 50%, experiencing a spectacular increase in 2019, where it went from 735.9 to 900 euros per month.

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