Spain raises minimum wage by 5 percent

MADRID

Spain's leftist government has said it would lift the minimum wage by 5 percent this year, brushing aside calls from business groups for wage restraint at a time of slowing growth.

The increase, which was agreed with the country's main unions and will be applied retroactively from Jan. 1, will represent an additional 54 euros per month, bringing the new minimum wage to 1,134 euros before taxes in 14 instalments per year - or 15,876 euros ($17,400) a year.

Salaries in Spain are traditionally disbursed in 14 monthly payments, with the extra months typically coming in July and December.

Socialist Prime Minister Pedro Sanchez, who secured another term in office in November, said around 2.5 million would benefit from the measure, mainly women and young people.

He said the minimum wage has increased by 54 percent since he came to power in 2018, when it stood at 736 euros a month, one of the lowest levels in Europe.

The increase, which comes after average inflation hit 3.5 percent last year, is part of the government's plan to bolster the net minimum wage to 60 percent of the country's average monthly pay.

Spain's main business association, the CEOE, and the CEPYME association for small businesses, had called for a more modest increase of three to four percent depending on the economic sector.

The Bank of Spain recently lowered the country's economic growth outlook for 2024, citing slowing private consumption.

The central bank now estimates that growth slowed to 2.4 percent last year and will expand by just 1.6 percent this year, below the bank's previous forecast of 1.8 percent.