The Government gives the starting signal for the negotiation that will determine the rise of the interprofessional minimum wage (SMI) in 2025. The first step will be taken by the Advisory Commission convened by the Ministry of Labor, which held its first meeting yesterday, setting in the coming weeks a revaluation proposal that will be transmitted to business and union organizations in a second phase of negotiation in the field of social dialogue. As a clear point beforehand, Vice President Yolanda Díaz already confirms that the level of the increase will not be less than inflationto guarantee the maintenance of the purchasing power of the more than two million workers affected by the minimum wage. This is, according to the estimates of the Bank of Spain, a minimum of 2.9%.
Another aspect that the head of Labor recognizes is that although the legal obligation is merely advisory, the Government’s intention is to agree on the increase with the social agents at the social dialogue table. This tripartite negotiation with employers and unions will not begin before December, and according to Díaz It could be delayed until 2025 has already begun. However, in this case it is worth remembering that the increase will be retroactive to January 1, 2025 – this circumstance already occurred with the 2024 increase approved at the beginning of February. However, Díaz demanded in this negotiating phase that the process be accelerated so as not to “harm” the companies, since they will have to compensate for the delay in employee payroll once the increase is approved.
At least the CPI
In this sense, as Díaz emphasizes, the increase will start from the value that refers to the average inflation of the year, that is, that 3% expected. But taking into account that the Government’s determination is reach 60% of the average salary in Spain – in compliance with the European Social Charter – the key to the increase is in the clarification of the statistical sources that Labor has already requested from the Advisory Commission, also as part of the project to reach a term in which the annual revaluation is automatic to adjust to the intended level.
The exercise of the assembled experts is to first establish what would be the appropriate statistical source, where in addition to the Salary Structure Survey and the Quarterly Survey of Labor Costs of the INE also the personal income tax withholdings of the Tax Agency and the statistics of Eurostat They offer versions of the average salary in Spain.
However, possible statistical sources offer radically opposite scenarios for an eventual link of 60% of the average salary in 2025, and in the medium term. The SMI is now at 15,876 euros per year. According to personal income tax collection, the average salary in 2023 stood at 23,981 euros per year – 14,388 euros per year would be 60% -, so the current SMI would already exceed this level by one 10%. Secondly, the average salary for 2022 according to the INE Salary Structure Survey stood at 26,948 euros – 16,169 euros would be 60% -, leaving a margin to reach this figure of increase in the 1.8% about the current SMI. In the case of the INE Quarterly Labor Cost Survey, for the second quarter of 2024, the salary cost amounts to an average of 28,236 euros per year (2,353 euros per month) -16,941 euros would be 60% of the annual amount-, which would leave a margin for increasing the SMI on the current SMI level. 6.7%.
And finally, according to Eurostat, the average salary in Spain in 2023 was 32,528 euros – 19,517 euros per year would represent 60% – so for the minimum wage to reach this figure, it could still be revalued by 23%3,641 euros more per year (303 euros monthly).
Between 3 and 5%
But beyond the statistical sources that are considered to develop a more permanent link, it seems that the range is already set for the proposal, and the subsequent tripartite negotiation. By rate of salary increase, the agreements set a rate of 3.8%while the salary cost of the INE reflects an interannual advance of the 4%. For their part, the unions UGT and CC.OO. They have set a maximum position of 5%. So between the 3% minimum per CPI – which is also the increase recommended by employers and unions in the National Agreement of Agreements – and the 5% maximum the increase will be framed.
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