Half a million workers to benefit from 4% increase in minimum wage

Half a million workers to benefit from 4% increase in minimum wage
  • The move is in line with EU recommendations and the government aims to give further rises up to 2020

More than half a million workers in Spain on the minimum wage will see their pay packets go up by 4 per cent in January.

Government, trade unions and representatives of business have announced that they have reached an agreement whereby 533,978 people, some 3.5 per cent of those paying social security, will see their salary rise. It will go up from 707 euros to 736 euros, (where paid in twelve monthly payments plus two equivalent monthly payments in July and December, as is common in Spain)

Explaining the on Tuesday, Minister for Employment, Fátima Báñez, also said that the plan was to increase this amount in stages to 850 euros (where paid in 14 payments across the year) by 2020. Sources said that the government is planning the biggest increase in 2020 itself, which would be the largest single hike in the minimum wage in a year since 1983.

By 2020 the minimum wage will have gone up by 200 euros in four years.

The economy needs to grow

The move is in line with EU recommendations to set the minimum wage at around 60 per cent of the average salary. However the minister pointed out that to have funds to meet this requirement, the economy will need to grow by an average of 2.5 per cent a year and an average of 450,000 people extra a year need to find jobs and join the social security system.

For the moment the agreed 2018 figure of 736 euros, in the typical case of 14 payments across the year, is equivalent to an annual 10,302.60 euros before tax. The minimum for workers on day rates instead is now at 34.85 euros and domestic staff must receive at least 5.76 an hour.

According to data, women, foreign residents, unqualified personnel and those on temporary contracts are currently the most likely to receive the minimum wage. Age is also a factor, with someone aged 20 ten times more likely to be on the minimum wage than someone between 50 and 59 years old.

The Canary Islands is the region of Spain with the highest percentage of minimum wage workers and in terms of sectors of the workforce, the most affected are retail, hotel and catering, drivers and machine operators.

With the increase, the social system will collect an extra 33.22 million euros windfall in 2018.