July 9, 2020

Unions justify raising the minimum wage to promote the underground economy

The CEOE asks the Government to “think” well about a new wage increase due to the negative effects that the current one has had on agriculture and domestic work

They are collateral damage. The “punctual” negative effects that have affected sectors such as domestic employment or agriculture se have been compensated "by far" for the benefits of the average, said CC OO. This has justified the Working Commissions the increase in the number of irregular workers and overtime not paid as a result of the rise in the Minimum Interprofessional Salary (SMI). These pernicious effects, already predicted by certain organizations, were confirmed yesterday by the Secretary of State for Social Security, Octavio Granado, who recognized the existence of "problems" derived from raising the salary to 900 euros.

"The rise in 2019 has allowed us to rebalance part of this difference" that separates us from the countries around us, "without generating negative effects on employment," says Comisiones Obreras. The union has alleged in a statement that the rising submerged economy in agricultural employment observed by the Government “It is conditioned by structural components of these two activities, which facilitate the existence of the submerged economy ”. For this reason, any increase in working conditions or protection impacts your employment, explains CC OO. "The way to approach it is not giving up extending work improvements to its workers, but with more labor inspection," says the union.

The businessmen have ruled against the passivity of the Government. If Granado said yesterday that a new regulation such as that of 2005 did not seem necessary to fight against these problems, today the president of the Spanish Confederation of Business Organizations (CEOE), Antonio Garamendi, has called for measures to curb the increase in the submerged economy . In statements to the media in the framework of a CEOE-Cepyme business meeting, the business leader has referred to the negative effect that the increase in SMI has had on the agricultural employment, where almost 70,000 workers "are no longer in the economy". As for the 13,000 domestic workers that have been replaced by people in irregular situation, Garamendi has stressed the need for them to be part of the system. "That they are in the submerged economy is a mistake that should be solved, rethought and think, because people have to be in the system and pay some taxes."

In this sense, the president of the CEOE has recalled that "the great problem of Spain", the submerged economy, accounts for 24% of Spanish GDP, compared to 13% in Europe. The Technicians of the Ministry of Finance (Gestha) warned in January 2019 that the lack of personnel dedicated to combat these fraudulent practices is not enough. In addition, in the event that Spain was able to reduce the almost 10 percentage points that separate it from the European average, some 38,000 million euros per year could be raised between taxes and Social Security fees defrauded. “When talking about what tax pressure Spanish companies are smaller than those of other countries because of the submerged economy, because the fiscal pressure is what is paid for the number of inhabitants. The more people there are in the submerged economy, there seems to be less fiscal pressure, ”Garamendi added. Regarding a new possible rise of the SMI in January 2020, he has asked the Government to think "things very well" and take into account the context of economic slowdown.

. (tagsToTranslate) Minimum Salary (t) Government of Spain (t) CEOE (t) Trade Unions

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