This is how the new increase in the minimum wage will affect employment




Young people without qualifications, domestic workers, farm workers and SMEs and the self-employed they will be the main victims of an imminent increase in the minimum wage, whose percentage of increase is still unknown today. The reason? Nobody agrees, neither in the Executive itself, nor the latter with the social agents. While the ministers of the socialist wing and of Podemos are fighting over the opportunity or not to raise the indicator, the unions demand beyond an aesthetic measure, which, in any circumstance, is rejected at this time by the employers, especially of the small and medium-sized companies. Thus, Cepyme He decided yesterday to put concrete figures on the consequences that, in his opinion, this decision will bring.

According to a study carried out by Randstad Research with the collaboration of the employers' association of SMEs, an increase in the SMI to 1,000 euros in fourteen payments (1,166.67 euros / month) in 2022 (which would represent an increase of 5.3%) , and an intermediate increase of 2% (969 euros in 14 payments, 1,130.50 euros / month) would have a negative impact on the estimated employment of between 60,000 and 130,000 jobs from its entry into force until 2023, including both jobs destroyed and those not created as a result of rising wages.

The danger is also concentrated in the sectors most affected by the pandemic, in hospitality and commerceconcludes the report, which recalls that the 5.3% increase in the SMI for 2022 would mean a cumulative increase of more than 52.6% since 2016. Cepyme and Randstad also warn that “the consequences of this rise will have a special impact on the young people and workers with less qualifications, for whom it will be more difficult to find a job or keep the one they have ”.

Achieved goals of Sánchez

The document also draws attention to the fact that an important part of the autonomous communities already fulfill the objective that the Government is supposed to pursue by raising the SMI: that the minimum wage represents 60% of the average wage in the territory. Specifically, an increase in the SMI of 2% for this year (969 euros in 14 payments, 1,130.50 euros per month) would leave a proportion higher than 65% of the average salary in at least 9 autonomous communities and would exceed 60% in 12 of the 17 communities and it would be above 73% in two of them.

Spain is the third country in Europe with the highest increase in the SMI accumulated –adjusted for purchasing power parity– between 2016 and 2021 (47.7%), after Romania and Lithuania, and multiplies by five and by 10 the average increases of Germany or France. And it is that in 2019, the Government approved a 22% increase in this income, a rise that, according to calculations by the Bank of Spain, subtracted between 0.6 and 1.1 percentage points from job creation that year, a trend that it was primed with special virulence with young people and those over 45 years of age.

And if there are two groups in which the increase in the minimum wage can also
affect more strongly
Those are that of the domestic and farm employees, as ABC advanced. Both depend closely on this indicator and already show increases of almost 30% in two years, an escalation that is very difficult to digest, for example by pensioners or low-paid workers who need to hire the jobs of a caregiver. And the new increase will also take place at a time when jobs are being destroyed in both groups. According to the Social Security affiliation data, the domestic workers scheme had 386,489 affiliates in August, the lowest figure since 2012.

In the case of field workers The rise of up to 19 euros will come after a fall in employment of almost 4,600 jobs in one year and 15,406 in August, according to the latest data from Social Security. Industry sources alert this newspaper of the damage that the new rise will have, especially in permanent crops such as olive groves or fruit and vegetable crops that generate thousands of jobs. They explain that what this situation can cause is an abandonment of crops or a change towards crops that require less labor, although in this case with less or negative profitability.

Political battle

The political situation that has generated the debate on whether or not to raise the minimum wage is very complex. After months of internal tensions, of a pulse between Nadia Calviño and Yolanda Díaz, the president radically changed his mind and at the end of July it opened the door to a hike, which was also assumed by the economic vice president after months of denying it. But when it seemed that there was consensus, the tensions were made public again a week ago, after the Minister of Labor informed the social agents that the increase of up to 19 euros would be retroactive to September 1. A few hours later Calviño threw the idea to the ground after ensuring that the increase would be very limited and would apply from October. The decision is in the hands of Pedro Sánchez.

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