National minimum wage is among lowest in EU

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According to a study published in July 2002 by the CC.OO trade union confederation, Spain's national minimum wage is one of the lowest in the European Union (only Greece and Portugal have lower rates), and represents only 40% of the average wage.

According to a report published on 26 July 2002 by the Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO), the Spanish national minimum wage (Salario Mínimo Interprofesional, SMI) is less than 40% of the Spanish average wage, a rate far lower than the 60% of the average national wage recommended by the committee of independent experts which advises on the implementation of the Council of Europe's European Social Charter. The SMI plays an important role in the Spanish labour market because it maintains or establishes fair conditions in the establishment of exceptionally low pay. It guarantees a basic income for workers not covered by collective bargaining and serves as a reference for establishing other types of income that are closely linked to wages, such as unemployment benefit (which is received by an average of 600,000 people a month).

The CC.OO study finds that the SMI is one of the lowest national minimum wages in the European Union - see the table below. The monthly rate of the SMI is only EUR 43 more than Greece's minimum wage and EUR 110 more than that of Portugal. It is EUR 493 below the Irish minimum wage, the next lowest in the EU.

National minimum wage rates in the EU and USA, 2002
Country Monthly rate in EUR Spain=100
Luxembourg 1,290 250
Netherlands 1,207 243
Belgium 1,163 225
France 1,126 218
UK 1,124 218
USA 1,011 196
Ireland 1,009 196
Spain 516 100
Greece 473 92
Portugal 406 79

Source: CC.OO based on Eurostat figures.

According to the CC.OO study, the situation of the SMI has been worsening for four years. The purchasing power of workers on the minimum wage fell by 5.2% over the four years up to July 2002. The Workers' Statute establishes four criteria for the annual adjustment of the SMI: (a) changes in the Consumer Prices Index (CPI); (b) average national productivity; (c) increases in the share of work in the national income; and (d) the general economic situation. However, in practice the government takes into account only the first criterion, and specifically the official forecast for the CPI for December each year. This has been the case since 1994, and the result has been a lower growth in the SMI than would otherwise have occurred. The SMI is revised according to the deviation from the forecast CPI, and the trade unions are calling this revision to be quarterly rather than annual as at present.

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