Following an agreement with business representatives, the Spanish government will raise the minimum wage to 965 euros per month. When applied, the minimum wage will have risen by 30% in the last three years and comes at a time when doubts about the recovery are more present than ever.
Employers insist that this is not the time to raise the minimum wage, given that the Spanish economy is only at the beginning of the recovery and that it could hurt the creation of new jobs. In deciding to raise the minimum wage, the Spanish government looked at four variables, GDP, productivity, inflation, and salaries.
The Bank of Spain is not in agreement with the government, saying that a rise in the minimum wage could cost the country between 83,000 and 180,000 jobs. Of these jobs, it will be young people who are most affected.
The rise in the minimum wage will also hurt self-employed people with their state contribution increasing to a minimum of 290€ per month.