Social Security will increase its income by at least 247 million euros due to the increase in contribution bases associated with the 5.5% increase in the minimum interprofessional salary (SMI) agreed for this year,as stated in the Report that accompanies the draft Royal Decree that sets the SMI for 2020 at 950 euros per month for fourteen payments.
Thus, the daily SMI is established this year at 31.66 euros or 13,300 euros per year. For temporary and temporary workers, the daily SMI will be 44.99 euros, whileIn the case of domestic employees, the minimum hourly wage will reach 7.43 euros.
In the Report that accompanies this Royal Decree Project, it is calculated what the increase in the contribution bases that are affected by the rise of the SMI, fundamentally the minimum bases, would mean for the income of the system. In this sense, Labor calculates that each point at which the minimum contribution bases in the General Scheme increase (excluding special systems) will seek an additional collection of 28.9 million euros.As the increase in SMI is 5.5%, those 28.9 million euros would be multiplied by 5.5, which would yield a total of 158.9 million euros in total for this Regime alone.
Specifically, the Social Security bases that are affected by the increase in the SMI within the General Scheme are the minimum bases of contribution groups 4 (untitled assistants) up to 10 (pawns) and 11 (workers under 18 years, whatever their professional category), whose minimum base coincides with that of the SMI or is in an interval close to the SMI; and the categories of groups 1 (engineers and graduates) to 3 (administration and workshop managers) whose minimum base is higher than the SMI but increases by Law in the same proportion as this salary.
In the case of the Special System of Agricultural Workers on behalf of Others, the Ministry estimates that the additional income that will bring the rise of the SMI will be 21.56 million euros (3.9 million per point), while in the case of the System Special Household Employees will raise 13.91 million more (2.53 million per point).
Finally, in the case of the recipients of unemployment benefits (subsidy and contributory benefit), the increase in the SMI will entail contribution income of about 52.9 million euros (9.55 million per point). On the expense side,Work specifies that the impact of the rise of the SMI on the expenditure on economic benefits will differ depending on whether subsidies or pensions are caused, since the contribution base intervenes very differently in the different Social Security benefits, “with a more direct impact on the case of benefits for temporary disability, maternity, paternity and risk during pregnancy and breastfeeding, depending on whether or not these workers cause the benefit. “
In the case of pensions, the Ministry states, “the impact is long term.”“However, since there is the minimum guarantee of minimum pension, the higher expense is largely compensated by the minimum guarantee,” he emphasizes. The rise of the SMI to 950 euros is the result of the agreement reached this week by the Government and the social agents and will be approved shortly in the Council of Ministers, predictably on that of February 4. The rise in the minimum wage will have retroactive effects from January 1. THERE ARE NO “EFFECTS
Labor defends in this Report that the increases in the SMI in 2017, 2018 and 2019 “do not seem to have had significant negative effects on the pace of job creation.”“No conclusive results have been found,” says the Ministry regarding the impact on employment of the rise of the SMI in 2019.
Work explains that, although most studies find negative effects of SMI on employment, “these effects are generally small and concentrated in certain groups (workers with low wages, youth, workers with low qualification)”.
“Estimates suggest that the effects on aggregate employment of increases in SMI over the past decades have been limited. However, there seems to be more empirical evidence among those who argue that there is a positive effect of the increase in SMI in reducing inequality and poverty of workers “,holds.