In recent years, improvements in working conditions, sustained increases in the cross-occupational minimum wage, and the 2021 labor reform have helped strengthen the economy with record employment levels, greater labor force stability, and sustained productivity gains.
In this context, an immediate increase in wages paid by €1,221, as well as a tax exemption, requires a new step in this direction of progress and we aim to reach the European target of placing the minimum wage at around 60% of the average wage.
However, for this progress to have a real impact, it is necessary to correct the perverse effects of compensation and absorption.
However, in many cases, the suddenness does not manifest itself in a better effect. Not because it doesn’t exist until diluted by this mechanism, with very real consequences above the lowest wages.
In practice, many companies neutralize the increase by adjusting other accessories such as residence, security, responsibility or specific functions, so that the total nomination does not differ: the official figure is subject to this, but the actual input remains the same.
A regular case allows you to see it clearly.
Spanish camarero at his workplace.
Let’s imagine a person who receives SMI anterior, €1,184, and receives €120 in addition to performing team functions.
The monthly salary ranges from €1,304.
Between the minimum wage of €1,221, the company can increase the basic wage to €83 while reducing the salary increase to €83.
The end result is the same: an additional €1,304.
Nothing has changed about his work. Continue to coordinate with the same team, take on the same responsibility and carry the same load. The only thing that has been reduced is the economic value that is attributed to this function.
The minimum wage has improved on paper. In fact, professional recognition is waning.
This type of adjustment has a direct impact on purchasing power. Between prices, life and cost of living, many names remain unchanged.
Moreover, the impact is not the same for everyone. A special coup for candidates located around SMI, who mostly hold the women’s tribunethereby exacerbating the general pay gap.
But the problem is more about the individual level. Unrestricted compensation and absorption seriously weakens collective bargaining by removing complements and splitting negotiated categories, flattening pay scales.
Team members, employees, and workers, with or without due care, take the same steps to separate different functions, professional rankings are gradually disappearing.
Pedro Sánchez joined Yolanda Díaz in Congress.
The regulation of this mechanism does not mean interference in collective affairs or limitation of party autonomy.
Regular remuneration and absorption is a way to maintain a sense of agreed professional categories and supplements designed to recognize effort, experience, special working conditions or extraordinary forms of service delivery, to prevent them from becoming mere tools to abolish minimum wage requirements.
In this line, the government and the unions are concentrated, trying to set clear rules to avoid the perverse effects of unlimited compensation and absorption.
The adjustment of compensation and absorption existed in the previous SMI real implementing decrees, so the new instrument is not introduced until the existing limit is refined and limited to avoid undesirable effects.
This also includes the obligation to transpose the European directive on the minimum reasonable wage, the validity of which was confirmed by the Court of Justice of the European Union.
It is therefore not a derogation of Article 26.5 of the Workers’ Statute, but a regulation and regularization of this mechanism in terms of SMI updates, respecting collective bargaining and avoiding de facto elimination of pluses associated with effort, experience, training or door conditions.
The discussion is not just about the minimum wage, a central affirmation of the union movement, until we can allow these issues to arise. before turning to the names that need it most.
Without a firm correction, any increase in the SMI will continue to be an exercise that has a real impact on the lives of working people.
Taking the minimum wage is a necessary step. Making sure this translates into better efficiency for busy people is the way to go today.
*** Fernando Luján is Deputy General Secretary for Political Affairs of the UGT and Professor of Labor Law and Social Security at the Autonomous University of Madrid.
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