National minimum wage increased

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In May 2004, Spain's new Socialist government announced that the national minimum wage will be increased by 6.6% from July. This is the first stage in a substantial rise promised by the government during its term of office.

On 18 May 2004, Jesús Caldera, the Minister for Labour and Social Affairs in the new Socialist Party (Partido Socialista Obrero Español, PSOE) government that took office in April (ES0405202N), announced that from 1 July the statutory national minimum wage (Salario Mínimo Interprofesional, SMI) would be increased by 6.6%, from EUR 460.5 to EUR 490.0 per month. Such a substantial increase was one of PSOE's electoral commitments. It contrasts with the policy of the previous People's Party (Partido Popular, PP) government, which had in recent years increased the SMI only by inflation (ES0201249N). The new government has also stated that over the course of its term of office it will increase the SMI to EUR 600 a month.

The trade unions consider that the government's decision represents progress towards a fair SMI (ES0402201N). Both the General Workers’ Confederation (Unión General de Trabajadores, UGT) and the Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO) have stated that this is the first step towards complying with the minimum wage of 60% of the net average wage recommended by the committee of independent experts that advises on the implementation of the Council of Europe's European Social Charter (TN0208101S), which has been signed by Spain. Both union confederations welcome the fact that the government has accepted their call for a progressive increase in the SMI to EUR 600 per month.

The SMI corresponds to Spain's commitment under International Labour Organisation Convention No. 26- which it ratified in 1929 - to provide machinery whereby minimum rates of wages can be fixed for workers employed in certain fields in which no arrangements exist for the effective regulation of wages by collective agreement or otherwise and wages are exceptionally low. This legal guarantee is also laid down in the Workers' Statute (Estatuto de los Trabajadores) and is considered in Spanish labour law as an obligation on the public authorities to not allow wages below a certain threshold. The SMI affects just over 1 million workers and unemployed people who are not protected by collective bargaining. It is one of the lowest statutory minimum wages in the old 15 EU Member States, as indicated in the table below.

International comparison of monthly statutory national minimum wage rates, 2004
. In EUR Spanish SMI pre-July 2004 = 100 Spanish SMI post-July 2004 = 100
Luxembourg 1,369 260 239
Netherlands 1,249 237 220
Belgium 1,163 221 205
France 1,154 219 203
UK 1,105 210 193
Ireland 1,073 207 187
USA 877 167 153
Greece 605 115 106
Spain* 526 (pre-July 2004) 572 (post-July 2004) 100 100
Portugal 416 79 73

* The Spanish SMI is currently EUR 460.5 per month and will rise to EUR 490.0 per month from July 2004. However, this monthly sum is paid 14 times a year (ie there are two 'bonus' monthly payments). If the total annual payment is divided by 12, it produces the monthly figures of EUR 526 and EUR 572 used here.

Source: Eurostat, INE and MTAS, quoted in El País, 24 May 2004.

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