Amid efforts to address a sharp and temporary spike in prices, the country confronted a move to adjust the minimum interprofessional wage, known as the SMI, for an extraordinary year in 2023. The initiative was publicly announced by Yolanda Díaz, the Second Vice President and Minister of Labour, after a Friday meeting with a specially appointed expert commission tasked with guiding how the indicator should evolve. Díaz did not disclose exact figures during the announcement, signaling that the proposal would be a careful recalibration rather than a blunt leap. References were made to higher wage benchmarks in neighboring economies, such as Germany, Holland, and Greece, as a frame of reference. The minister emphasized that precautionary steps were being taken in light of the exceptional economic moment, underscoring the aim to balance worker protection with business viability. (Attribution: Ministry of Labour)
The adjustment of the minimum wage has traditionally been settled in February or December, often after a few conversations among social actors that conclude with or without a formal agreement. In those years when a deal is reached, the increase typically becomes effective on January 1. This time around, Díaz sought to set the stage for a negotiations process viewed as potentially difficult, with a clear intention to avoid a tense late negotiation that could disrupt employee expectations and business planning. (Attribution: Ministry of Labour)
By mid-November, a window of two and a half months was established for the expert panel to craft a new proposal for raising the SMI in 2023. The scenario originally contemplated by the committee did not align with the realities facing employers and workers in the present climate. The current context of rising prices and a widespread slowdown in collective bargaining discussions eroded the earlier estimates, which had been prepared more than a year before. The discussion moved beyond simple arithmetic of a percentage increase to address broader questions about cost of living, productivity, and the social safety net, while ensuring that the wage floor remains an anchor for fair compensation amid price pressures. (Attribution: Ministry of Labour)
The objective for Díaz was to encourage a constructive dialogue with business leaders and labor representatives alike, aiming to secure a negotiated agreement that would satisfy both sides without provoking a wave of discontent if expectations were not met. The stance of the country’s major employer federation, the CEOE, has been to resist any substantial rise in wage costs that could ripple through contract negotiations and hiring practices. Relations with the minister have been tense at times, reflecting the political energy around wage increases embedded in collective agreements. The minister’s openness to higher wage adjustments in the context of collective bargaining signals a willingness to push for stronger labor standards, even as it risks friction with some business groups. (Attribution: Ministry of Labour)