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ARCHIVED - Immediate increase in minimum wage puts pressure on Spanish businesses
The government plans to increase the minimum wage by 19 euros per year in 2021
President of Spain Pedro Sánchez has announced that the minimum wage in Spain will go up immediately as a way of combatting the seemingly unstoppable rise in the cost of electricity. The ‘immediate increase’ proposed by the government will see salaries rise by 19 euros a year, a measure that is set to be introduced before the end of 2021.
The proposal, which came after a 3-hour meeting at the Ministry of Employment in Madrid yesterday, also includes further salary rises of 31 euros per year in 2022 and 2023. Another meeting of government heads is slated for Monday September 6 to finalise the exact amounts and timeframes of the salary increase, with the hurry also being exacerbated by the 3.3% inflation rate in Spain.
While the unions decry that the increase falls short of what is needed, business owners in Spain will be hard hit at a time when the Covid pandemic and high electricity costs have already meant they need to tighten their belts. Among those which will be affected most and bars and restaurants, which are especially affected by restrictions to opening times and distancing measures and tend to hire minimum-wage workers.
Meanwhile, the government is stopping payments to many workers on Spain’s ERTE furlough scheme in a bid to get people back into work, a tactic which seems to be working as unemployment figures drop for the sixth month in a row.
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