Minimum wage raised to €965 despite employers' objections as unions push for €1,000

The increase of the minimum wage from €950 to €965 gross/month (14 installments), which will be paid retroactively from September 1, has been approved by the Spanish government in its weekly cabinet meeting on Tuesday. 

Workers in Spain will have to be paid at least €13,510 per year for a full-time job or €1,125 gross per month in 12 installments.

In mid-September, Pedro Sánchez's cabinet and the CCOO and UGT trade unions agreed to raise the figure to €965 per month despite failing to secure support from employers' associations.

With this 1.6% increase, the minimum wage now nears €1,000 gross/month — the equivalent of 60% of the average salary in Spain and one of the Socialists' electoral promises by the end of their current term in office.

Work minister Yolanda Díaz, a senior member of anti-austerity Unidas Podemos, the junior party in Spain's left-wing coalition government with the Socialists, said her cabinet will begin to work on further raises up to 60% of the average salary.

In Catalonia, where the poverty line is set at €915 per month, there have been calls for a higher minimum wage of €1,239 throughout the territory. Yet, the only administration that has the authority to set a minimum wage is the Spanish government.

Earlier this month the cabinet's goal of raising the minimum wage by €15 by the end of the year was discussed, as well as by an additional €31 for each of the remaining two years of the legislature, although government officials suggested there would be a €12 to €19 monthly increase this year until reaching a maximum of €1,049 gross per month in 2023. So far only an increase for 2021 has been approved.

Employers' associations have expressed their reluctance to get behind a minimum wage increase, especially after it rose by a record-breaking 31.8% during Sánchez's first term between 2018 and 2020.

They also argue that many companies are yet to recover from the economic downturn caused by the pandemic and cannot afford to pay their employees more.

As for unions, they call for a €1,000 minimum wage by the beginning of 2022. UGT's secretary-general, Josep Maria Álvarez, admitted that the €15 increase agreed with the government "is shit," and warned that protests could be called if the €1,000 milestone is not achieved.

Furlough pay extended until February 2022

On the eve of the minimum rase increase approval, the Spanish government, employers' organizations, and unions reached an agreement to extend the temporary unemployment scheme, known as ERTE in Spanish or ERTO in Catalan until February 28, 2022. 

Workers who are currently furloughed will be able to receive the same benefits for another month after they were set to expire, until October 31, while the new program will be in place from November 1 through the end of February.