Spanish Prime Minister, Pedro Sanchez, on Wednesday said that his cabinet would approve next week a 22 percent increase in the monthly minimum wage to 1,050 euros ($1,192), a wage over N429,000, effective from 2019.
Sanchez told the parliament the proposed wage increase document, “the biggest since 1977”, would be submitted to a cabinet meeting in Barcelona on December 21.
He quipped: “A rich country can’t have poor workers.”
Sanchez, who is expected to call an early general election next year, explained that the measure was part of his minority Socialist government’s draft 2019 budget unveiled in October but which he is struggling to pass in parliament so it will now be approved by decree.
Interestingly, the announcement comes after French President, Emmanuel Macron, unveiled Monday a 100-euro ($113) per month increase in the minimum wage from next year in a major concession to “yellow vest” protests which have roiled the country.
Online reports indicate that after years of austerity policies imposed to cope with the fallout from the 2008 financial crisis, governments are under increasing pressure to ease the purse strings, especially for the lower paid.
Sanchez’s Socialists control just 84 seats in the 350-seat parliament, the smallest number for a government since the country returned to democracy following dictator Francisco Franco’s death in 1975.
The Prime Minister negotiated the draft 2019 budget with far-left party Podemos, which controls 67 seats, but would still need the support of Catalan separatist parties to pass the spending plan and they have steadfastly refused.
The government estimated the minimum wage hike would cost the state 340 million euros per year.
As expected, employers groups and the conservative opposition parties, the Popular Party (PP) and Ciudadanos, oppose the wage hike, saying it will hurt job creation.
The PP leader, Pablo Casado, was quoted as saying that the 2019 budget, which also includes tax hikes, is “economically suicidal”.
