Prime Minister Pedro Sanchez has been under pressure from coalition partners for months to accede to the wage hike.
In July, the Labour Minister Yolanda Diaz said Sanchez needed to demonstrate the same courage he showed when pardoning jailed Catalan separatists and raise the minimum wage.
Diaz, a member of Podemos, is a key figure in the ruling coalition led by Sanchez’s PSOE. She did not lose her portfolio in the recent cabinet reshuffle, a move Podemos warned would force them to renegotiate their often fraught pact with PSOE.
“The same courage that we had in the government with the granting of pardons now has to be had with the people who are having a hard time. In 2023 we will not be tried for pardons. We are going to be judged by people who are suffering and that is where we have to be,” Diaz said on July 5 in reference to the next general election which is due to be held in 2023.
Earlier, Diaz said she is in favour of raising the minimum wage by 10 per cent but that it is up to the government to decide.
“We have skyrocketing prices for electricity and other basic products. It is very striking that we leave those who need it most with this protection,” she said ahead of a meeting with Sanchez on June 24.
In May, the Advisory Commission for the Analysis of the Minimum Wage suggested a 10 per cent hike to the minimum wage.
If approved, the increase could see the minimum wage in Spain rise from €950 per month to €1,045 per month.
The government is under pressure to approve the proposed hike not only because they will face re-election in 2023, but because of growing public anger against increasing expenses such as costly electricity bills.
The Bank of Spain said the last minimum wage hike may have backfired and cost the country 180,000 jobs, an argument now being used against another raise.
Diaz however has dismissed linking the two as an “enormous mistake” and “pure ideology”.
The Bank estimated that the 22 per cent rise in the minimum interprofessional wage launched by the current government caused the labour market to slow down.
“Following the increase, the employment of low-wage workers grew more slowly,” the bank said on June 8.
“There was a larger adverse impact on the job losses of older workers and a sharper reduction in hours worked and in job creation for younger workers,” it added.
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