Raise the minimum wage now

There are wise decisions made at suspicious moments. The increase in the interprofessional minimum wage (SMI) is a good example of this. The Minister of Labor, Yolanda Díaz, has asked the committee of experts to propose the increase for 2027, by early November at the latest, so that it can be approved before the November 29 elections, when it is normally approved in February. Coincidence? Not at all. The employers' association has rushed to denounce it as electoralism, and with good reason: the SMI affects some 2.5 million people, many of whom have the right to vote.

But the haste and the demands of the unions have another interpretation. If the polls are right, the PP and Vox will win on November 29. And the PP is clear about it: the SMI should only be raised with the agreement of both unions and employers. Put like that, it sounds like social dialogue, but in practice, it means giving veto power to the CEOE, which has not signed any increase for six years. For the unions, approving the 2027 increase now is the only insurance they have. A one-year insurance policy, because 2028 will already depend on the new government.

The fear is not unfounded. Under Rajoy, the SMI went from 641 euros to 736: a 14.7% increase in seven years. In 2012, he froze it for the first time in democracy, and in 2014, he froze it again. It is true that the PP inherited a very harsh crisis, with unemployment above 26%. But in 2015 and 2016, the economy was already growing above 3%, and the minimum wage rose by 0.5% and 1% respectively. The big jump, 8% in 2017, was not his idea: it was pushed by the PSOE in exchange for supporting the spending ceiling.

With Sánchez, since 2018, the SMI has gone from 736 to 1,221 euros, 66% more. Excluding inflation, the real gain is around 35%, almost four times that of the previous period. It has not been a straight line either: in 2021, in the midst of covid, the increase remained at 1.6% and did not arrive until September. Both periods slowed the increase in times of crisis, but only one also slowed it down when the economy was growing.

The usual argument against SMI increases is that productivity does not grow. But a good part of those who earn the minimum work in hospitality and commerce, sectors that have grown a lot –thanks, to a large extent, to low wages– and which, by their nature, have little room to gain productivity. Linking wages to them is condemning them to always stay low. The country's productivity will not improve by squeezing waiters, but by betting on more productive sectors.

And there is a compelling reason to raise it: the loss of purchasing power. Until September, prices have risen on average by 3.3%, more than the 3.1% that the SMI rose, and experts predict that inflation will remain above 4% in the coming months. All of us wage earners notice it, but not all equally: those who earn the minimum have less margin to absorb it, and their salary is the only one that the government can raise by decree.

The electoral calendar explains the rush. The shopping basket explains the need. And what happened the last time the PP governed explains the union demands.