Minimum wage debate splits Spanish government

Tensions are mounting amongst Spain’s coalition government team over plans to increase the minimum wage in the New Year.

The Labour Ministry’s Yolanda Diaz revealed a split in the ranks as her department looks to increase minimum salaries from the current €950 a month.

After discussions with business groups and unions, Diaz said ‘it would not make sense’ to hold back a minimum wage increase for the lowest earners after an agreement to increase pensions and civil service pay.

However, Diaz – a member of the junior government partner Unidas Podemos – faces fierce opposition from the Ministry for the Economy, controlled by the socialist PSOE Nadia Calvino.

Her ministry believes it would be an unnecessary burden for employers as the country battles its worst economic crisis since the 1930s and the Civil War and argues the minimum wage has increased significantly over the last two years.

It means a difficult balancing act for Prime Minister Pedro Sanchez, at the helm of the first coalition government since the return of democracy in 1978; especially as concrete proposals for an increase may arrive in his office by the end of the year and he will have to decide which side to back.

Part of the agreement signed by Sanchez and Podemos leader Pablo Iglesias back in January is a target to have a minimum wage set at €1,200 by 2023.