The increase in the interprofessional minimum wage (SMI) of 22% in 2019 caused a wave of warnings about potential negative impacts on employment that the passage of time has shown to be unfounded. In total, in five years the SMI has increased by 47%, going from 735.9 euros in 2018 to 1,080 euros in 2023. And all studies show that its job destruction effect has been minimal.. It is one of the conclusions that have raised the most consensus in this morning's debate in the General Council of Economists between the Director of Research at Fedea, Marcel Jansen and the economist of the economic cabinet of CC.OO., Luis Zarapuz.
“The impact of these increases on wages has been considerable on low wages, with a very moderate, if not small, impact on employment,” stated Jansen, who has cited reports such as that of the OECD, which indicate that the rise in 2019 allowed an increase in the salary of affected people of 5.8% while the impact on employment was only 0.6%. And here he had a reminder for that erroneous forecast from the Bank of Spain that pointed out that that increase in the SMI had caused the loss of up to 180,000 jobs. “An extrapolation of dubious quality,” the Fedea economist has described it.
In this thesis, Luis Zarapuz, from CC.OO., agrees, pointing out that the negative impact of the increases in the SMI is increasingly minimized and that, in addition, they are compensated by the favorable impact on the increase in consumption.
This is where the consensus reached, and when looking to the future the divergences emerged. On the one hand, about what had to be done for next year regarding the SMI and also about whether its design should be changed, whether to continue with a single minimum wage or move to a regionalized one.
Looking ahead to the SMI of 2024, the social dialogue that the Government must maintain has not yet started, although the decision is exclusively its own, but the objective of CC.OO. is that it remains at 60% of the average salary. It is something that was achieved in 2023 and that now the union asks to maintain. “The SMI can and should continue to be raised,” says Zarapuz, to which Jansen replies that “from now on, further jumps in the SMI must be avoided,” and that we must act with “caution.”
Furthermore, CC.OO would welcome establishing by law the equivalence of the SMI with 60% of the average salary and, on the other hand, Jansen, from Fedea, replies that establishing it by law “would be a poor response, without a clear argumentative basis.” ”.
Another point of disagreement is whether the current single SMI is appropriate for the entire country or adapted to each territory. This is a common claim of the employers' association, which argues, for example, that the situation in Madrid and Barcelona is different than in other parts; something that unions always reject, stating that it is a basic minimum. “The state SMI is not negotiable. Flexibility, territorial adaptation comes hand in hand with collective bargaining...we are not going to create 17 autonomous SMIs by law," says Luis Zarapuz, from CC.OO. On the other hand, Jansen, from Fedea, replies that "a universal SMI must "set a floor and let some territories increase it. I don't understand why the unions don't open themselves to this debate."
