Government proposing minimum wage rise at inflation rate

The Government, the unions and the employers have already begun to outline their positions regarding the negotiation to raise the Minimum Interprofessional Wage (SMI) that the self-employed and companies will have to pay their employees for 2024, expected to be implemented in January.

Following the proposal from the business sector last week to raise the minimum wage by 3%, the Minister of Labour, Yolanda Díaz, assured that she “positively” values ​​the employers’ position but sees it as insufficient. According to Díaz, as a starting point in the negotiation we would have to take into account the rise in the cost of living this year. That is, the accumulated inflation between November 2022 and November 2023 should be taken at least as a “reference.”

According to the minister, the increase in the Consumer Price Index (CPI) in this period would have been 3.7% or 3.8% . Therefore, this figure should be the starting point to raise the SMI for next year. If this figure is finally taken as a reference, the minimum salary in our country would become 1,120 euro per month in 14 payments, 40 euro more than right now.

This increase proposed by the Government would mean an annual extra cost of more than 720 euro for the self-employed for each employee, adding salary, extra payments and contributions. However, this would not be the maximum increase that is being considered on the table, since the unions’ proposal could be to set an SMI of 1,200 euro per month, which would mean an even greater extra cost for businesses.

Since January 1, 2023, the minimum amount that an employee with a 40-hour work week can earn amounts to 1,080 euro per month in 14 payments, or 1,260 euro per month if divided into 12. That is, 15,120 euro gross per year.

Until this year, after the last increase in the Interprofessional Minimum Wage that occurred since January, the minimum salary was 1,080 euros per month in 14 payments – 1,260 euro for 12 months. With these conditions, and adding the contributions, the cost per worker in the SMI that the self-employed have to assume in 2023 is 1,735 euro per month. Or, 20,820 euro per year.