Thursday, September 29

The minimum wage, pending a consensual increase, remains at 965 euros

The minimum interprofessional wage (SMI) starts in 2022 located in 965 euros per month for 14 payments until the Government negotiates the new amount with unions and employers. The intention of the Executive is that the SMI continues to rise to meet the commitment to reach 60% of the average salary by the end of this legislature. The decision to extend the amount of the SMI appears as a provision within the decree of the labor reform, in force since last Thursday. Specifically, said provision maintains the validity of the Royal Decree-Law of September 2021, which includes the increase in the SMI to 965 euros, and maintains it at that amount until another Royal Decree is approved with the figure agreed within the social dialogue. The latest increases in the minimum wage have not had negative effects on the recovery of employment in a context of higher inflation, so the arguments for further increases are reinforced. According to data published by the National Institute of Statistics (INE) at the end of last November, the average monthly salary, in gross terms, rose by 2.8% in 2020, to 2,038.6 euros, its highest figure since the series began in 2006.

Social dialogue

Although the Government does not have the obligation to agree to the increase in the SMI with unions and employers, only to consult them, the Ministry of Labor has always been in favor of doing so with an agreement in social dialogue. The increase resulting from this negotiation could be retroactive, although not necessarily from January 1, 2022. The last increase in the SMI was approved on September 28 and was applied retroactively from September 1.

This increase was 15 euros per month, the SMI going from 950 euros to the current 965 euros, and all this as a result of an agreement reached between the Government and CCOO and UGT, which the business organizations did not support. This increase of 15 euros was applied following the proposal of the Advisory Commission for the Analysis of the Interprofessional Minimum Wage, which proposed for 2021 a range of increases of between 12 and 19 euros per month.


The agreement signed by the Government and unions established the commitment that the SMI, through its “progressive revision” in 2022 and 2023, reaches 60% of the average salary before the end of the legislature, as determined by the European Social Charter signed by Spain and as promised by the coalition government. The CEOE and Cepyme business organizations were left behind from this agreement, since they understood then that it was not the time to raise the minimum wage so as not to harm the economic recovery and job creation.

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The unions have already indicated on several occasions that they want the SMI to arrive in this year that begins at 1,000 euros per month, which would mean raising it by 35 euros compared to the current amount and that for the moment it will remain in force. The commission of experts created by Labor to analyze the path of rise that the SMI should experience to reach 60% of the average salary in 2023 drew three possible scenarios, depending on how much the average salary rose in 2020. In the first scenario, which started If the average salary rose by 1.8% in 2020, the SMI would have to rise 99 euros until 2023, with experts advising an increase of 19 euros in 2021, and of 40 euros in both 2022 and 2023. In the second scenario , which started from a 0.9% rise in the average salary in 2020, the SMI should increase a total of 77 euros until 2023 to reach 60% of the average salary. For this, the recommended path is to raise the SMI by 15 euros this year, and 31 euros in both 2022 and 2023. The third and last scenario was that the average salary did not experience any increase in 2020, in which case they considered that the SMI would have to rise 61 euros between 2021 and 2023, with increases of 12 euros this year, 24 euros in 2022 and 25 euros in 2023.

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