Unions call for major increase in minimum wage

Download article in original language : ES0402201NES.DOC

In December 2003, Spanish trade unions called for the national minimum wage to be increased from EUR 526 to EUR 660 per month. They point out that: minimum wage recipients have suffered a loss in purchasing power in recent years, the minimum wage is only 40% of the average wage; and Spain's is the second-lowest statutory minimum wage in the EU.

In a proposal issued in December 2003, the Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO) and the General Workers’ Union (Unión General de Trabajadores, UGT) renewed their call for the government to increase substantially the statutory national minimum wage (ES0009107N).

Spain's national minimum wage (Salario Mínimo Interprofesional, SMI) aims to guarantee a certain level of pay in those activities or situations which are not covered by an effective wage bargaining system. The SMI also serves as a reference for establishing other incomes linked to wages, for unemployment benefit and for other incomes such as the benefit paid to workers of bankrupt companies by the Wages Guarantee Fund (Fondo de Garantía Salarial, FOGASA) (ES0012226F), the 'minimum integration income' (rentas mínimas de inserción) and social wage social assistance payments.

Some 800,000 workers are directly affected by the SMI and 1.5 million are indirectly affected by it. Over 1998-2003, these workers suffered an accumulated loss of purchasing power of 5.9 percentage points, owing to below-inflation increases in the SMI (ES0201249N) - see table 1 below.

Table 1. Development of purchasing power of SMI national minimum wage, 1998-2003 (%).
Year Increase in SMI Annual average increase in retail prices index Change in purchasing power
1999 1.8 2.3 -0.5
2000 2.0 3.4 -1.3
2001 2.0 3.6 -1.5
2002 2.0 3.5 -1.4
2003 2.0 3.3 -1.3

Source: National Institute of Statistics (Instituto Nacional de Estadística, INE).

In comparative terms, the SMI has also grown less than the average wage. Over the 1995-2003, the growth of the SMI was 11.0 percentage lower than that of the average wage and 10.4 points lower than that of the average wage agreed by collective bargaining - see table 2 below. The SMI currently represents around 40% of the average wage. This is considerably lower than the 68% of the average national wage or 60% of the net average wage recommended by the committee of independent experts which advises on the implementation of the the Council of Europe's European Social Charter (TN0208101S).

Table 2. Comparative development of minimum, collectively agreed and average pay, 1995-2003
Year SMI Average collectively agreed pay Average pay
1995 100 100 100
1996 103.5 103.8 104.5
1997 106.2 106.8 108.0
1998 108.4 109.6 110.5
1999 110.4 112.5 113.1
2000 112.6 116.7 115.7
2001 114.8 121.0 119.7
2002 117.1 125.6 124.4
2003 119.5 129.9 130.5
Total differential in comparison with the SMI, 1995-2003 (percentage points). 10.4 11.0

Source: INE.

Measured in EUR, the Spanish SMI is the second lowest statutory national minimum wage in the current European Union- higher only than that in Portugal - and is less than half of that in six out of the eight Member States with a minimum wage established by law (see table 3 below). The trade unions claim that the current SMI not only fails to meet the recommendation of the Council of Europe's committee of independent experts, but also fails to offer a minimum distribution of wealth, thus leading to the social exclusion of those who receive it - almost 10% of all wage-earners in Spain.

Table 3. International comparison of monthly statutory national minimum wage rates, January 2003
Country EUR Spain= 100
Luxembourg 1,369 260
Netherlands 1,249 237
Belgium 1,163 221
France 1,154 219
UK 1,105 210
Ireland 1,073 204
USA 877 142
Spain 526 100
Portugal 416 79

Source: Eurostat.

CC.OO and UGT are pressing the government to increase the SMI from EUR 526 to EUR 660 per month. They want to make the SMI 'a qualitative reference as a basic survival income'.

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment