Agreement to raise the minimum wage to 1,000 euros in 2020

The President of the Government has committed to raising the minimum wage by 361% over two years, as requested by the opposition

That no worker should earn less than 1,000 euros a month. That was the aim of the document signed by unions and employers' organisations at the beginning of the month.

The pact was called the Fourth Agreement for Employment and Collective Bargaining (AENC) and advocated an increase in the minimum wage to 1,000 euros in 14 installments by 2020, as explained by El HuffPost. No worker covered by a collective agreement could earn less than that amount from that year onwards.

The measure included in the agreement had a limited impact. It only affected around two million workers who earned less than that amount, according to calculations by the CCOO union. The most benefited were employees in sectors such as commerce and hospitality.

However, the wage agreement signed by unions and employers would not benefit all citizens, since a large part of workers are not protected by any agreement. In Spain there are more than 4,000 agreements that protect nearly ten million employees. That is, approximately half of the 19 million workers in Spain.

The government wants to go even further. Pedro Sánchez intends to raise the minimum wage to 1,000 euros per month in 2020, as reported by El Confidencial and confirmed by Sánchez himself in an interview published this Monday in Eldiario.es. The socialists already demanded this increase when they were in opposition.

The minimum interprofessional wage is currently set at 736 euros per month in 14 payments. Sánchez's announcement represents an increase of 36% in two years, that is, an increase of 264 euros.

There are around 534,000 workers earning the minimum wage in Spain who will directly benefit from this increase. They represent approximately 31% of workers.

The previous government of Mariano Rajoy agreed with the social partners a progressive increase in the minimum wage up to 850 euros in 2020. The increase would be divided into three stages: a 4% in 2018 (736 euros), a 5% in 2019 (773 euros) and a 10% in 2020 (850 euros). Now this agreement would remain a dead letter.

"Not only am I committed, but the unions and employers themselves have signed this agreement that we support. Spain is growing, but it is not redistributing that growth. Right now, the distribution of income between workers and business profits is absolutely unbalanced. I think that we need to restore that balance and to do so it is essential to recover the power of collective bargaining," Sánchez said in the interview.