SPAIN’S government has increased the minimum wage in line with its pledged scale of rises back in 2018, which aims for it to reach the European Union requirement of 60% of the national average wage by the year 2022.
The minimum gross pay a person working a full-time, 40-hour week can earn is now €950 per month in a 14-month year, up from €900 in 2019.
Traditionally, employees in Spain would receive a double pay packet in August and again at Christmas, and the minimum wage is always calculated on this basis, even though fewer and fewer firms follow this practice nowadays.
Over a 12-month year, the gross minimum wage sat at €1,050 a month until this week, and will now rise to €1,108.33.
As a result, the average worker on the minimum wage in a full-time job will have seen his or her monthly take-home pay, based upon 12 pay packets a year, rising from €964.50 to €996.80.
When the left-wing socialist government came into power in June 2018, the minimum wage was €735.90 a month over a 14-month year, or 12 monthly take-home pays of approximately €791.70.
During the right-wing PP government’s reign from November 2011 to June 2018, the minimum wage only rose by a total of €94.50 in six-and-a-half years, or 14%.
It went up in 2013 by just €3.90 a month before tax, then two years later, by €3.30 a month, having been frozen in 2014.
Another €6.60 monthly increase was agreed in 2016, taking the minimum wage to €655.20 in 14 payments, or approximately 12 take-home pays of €700.
In the three years before the PP’s reign, it had barely gone up, being above €600 but below €640 as a gross figure paid in 14 instalments.
The newly-announced increase means that in the past two years, the minimum gross monthly wage for a full-time, 40-hour-a-week job will have gone up by 29%, or by €214.
President Pedro Sánchez’s coalition partners Podemos want to see it rise to a minimum of €1,000 in 14 payments, which will give 12 monthly take-home salaries of approximately €1,030.
This is expected to be the case by the beginning of 2021.
Eventually, and sooner rather than later, Podemos wants a minimum income for every one of €1,200 a month after tax.
In 2018, the average wage in Spain was €1,889 a month before tax, or a take-home pay of €1,524.20, although 30% of employees earned less than €1,230 before tax or €1,064.10 net.
By 2019, the average gross monthly pay had risen to €1,970.54, or a take-home of €1,582.40.
But the most frequent, or modal average, was €1,456.83 before tax, or €1,216.70 net.
This means with the new minimum wage rise, the EU’s criteria of minimum pay being at least 60% of a country’s average pay is met – based upon 2019 figures, this 60% would be €949.44 after tax, which is, in fact, €47.36 less than the lowest earners are now entitled to receive.