Tuesday, September 28

The following battle arrives over the minimum wage: how much to raise it and if the increase will include September

In the absence of an official announcement from the Government, the increase in the minimum wage by the end of 2021 is already taken for granted. The key and the center of the debate for the next few days lies above all in the amount of the increase, as well as since when it will be applied. The forecast is to include the month of September, but it is a point still under discussion. The negotiation will take place in the social dialogue with the unions and employers, but also within the Executive, where a proposal for an increase has not yet been closed.

The Government prepares a proposal to raise the SMI in September to bring to the social dialogue table

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After months of disagreement, the coalition government already sounds the same melody about the willingness to raise the minimum wage this 2021. At the beginning of the year, the Second Vice President and Minister of Labor, Yolanda Díaz, defended its increase, although it was testimonial , such as the 0.9% increase in pensions and public salaries. But President Pedro Sánchez opted for the freezing of the SMI demanded by the economic vice president, Nadia Calviño, given the crisis caused by the pandemic.

After several months with a very favorable evolution of the employment data, better than expected and that has placed the affiliation almost in a pre-pandemic situation, the resistance of the socialist wing of the Executive has yielded. Calviño has highlighted in his latest speeches the need for job creation, but also for an “improvement in working conditions”, which he has highlighted as “the most powerful combination” for economic recovery. A few months earlier, the government’s economic manager had just focused on the first element –the creation and recovery of jobs– to justify the freezing of the SMI.

Now, it is time to define the details of the rise in the lowest wages, which is a power of the Government, but it reiterates its intention to make the decision accompanied by the social agents. The context is no longer that of the beginning of the year, with the forecast of strong economic growth at the end of the year, so the unions are demanding a more ambitious increase. The businessmen, on the other hand, maintain their public discourse in opposition to the increase in the SMI, so everything suggests that they will strive to contain the rise as much as possible.

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Executive sources insist that the figure to increase the lowest salaries has not yet been decided. This conversation is taking place between Trabajo and La Moncloa. First, they insist on the Government, you have to listen to social dialogue. Vice President Nadia Calviño placed the debate on the SMI after the summer, “in September”, and Trabajo has not delayed a day to address the negotiation. The Ministry led by Díaz has summoned the CCOO and UGT unions and the CEOE and Cepyme employers on September 1 to address the negotiation in social dialogue.

The majority representatives of the workers reiterated this Thursday that they will not settle for a “testimonial or aesthetic” rise, in the words of the CCOO leader, Unai Sordo. Workers with these lower wages have been with their salaries frozen for the vast majority of the year, compared to other groups, and also now the context is of sharp rise in prices, including some basic goods such as electricity, which is at record highs .

“We are not in January 2021, so we are not considering an increase like the one referred to then, from 0.9% to 1.3%. Prices are now as they are, touching 3%,” Sordo reminds this media . “Our position is for an increase of 3%, a guarantee of purchasing power in 2021. If not, we are going to ask for a guarantee of increase for 2022. We do not want to see ourselves again as at the beginning of this year, with a rise conditional on growth economic or employment “, adds the secretary general of CCOO.

In UGT they also demand the need to speak of a “path of rise”, even until 2023, not only about the increase in the minimum wage for the final stretch of the year and with 2022 just around the corner. “With the minimum wage it rains over the wet and we are a little tired, not to say burned, of one thing appearing today and another tomorrow,” said Pepe Álvarez, union leader, on Thursday. “We are going to see if the government finally agrees with the majority of European countries,” added Álvarez. Spain is in the minority of states that have frozen the lowest wages.

Although the Government does not speak for the moment of figures, Vice President Yolanda Díaz usually refers to the report of experts commissioned by the Ministry of Labor to define the path of raising the SMI until the commitment of 60% of the average salary at the end of the legislature. The committee recommended an increase from 1.3% to 2% this year, about 12 to 19 euros per month, depending on different scenarios.

For their part, the bosses are still rooted in the public discourse of “now no touch.” In CEOE they refer to the last words of the president of the employer’s association in this regard, in July. “We think that in the current circumstance it is not the time to talk about SMI when we are in the recovery phase,” said Antonio Garamendi, who stressed that in some regions, such as Extremadura, it is a sensitive issue that greatly worries businessmen.

Another possible reference for bargaining is what is happening in collective bargaining, that is, in the collective agreements signed throughout 2021. According to the latest available data, until July, the average wage increase agreed was 1.6 %.

Up since September 1?

There is another pending issue, in addition to the amount of the increase in the SMI: the beginning of the application of this. Although everything seems to indicate that the increase will take effect from September 1, there are still some doubts – and concerns – about it. In the unions they have been demanding an urgent rise for months and denounce that September “is already late”, so they do not consider any other option than an increase for the last four months of this exercise.

However, as the Government wants to give space to social dialogue and businessmen continue to defend their refusal, there are some fears that the negotiation will be delayed and the increase may be postponed a little longer.

Employers have stressed on several occasions that setting the SMI is the responsibility of the Executive, with apparent little desire to negotiate. In the past they already did the same and in the end they agreed to a pact to raise it to 950 euros. The bosses’ leaders affirmed that they would have “preferred a little less to rise.” But “we were much more concerned about the amount of 1,000 euros,” they added. Now, businessmen do not have backing in the Executive to maintain the freeze, as happened with Calviño at the start of the year, so they may have more will to negotiate.