The Interprofessional Minimum Wage (IMW or SMI) in Spain has been a subject of great debate in recent years, and recently, the Spanish President, Pedro Sánchez, announced an 8% increase in its value. Starting on January 1, 2023, the IMW will reach 1,080 euros per month, with retroactive character.
This increase has been made possible thanks to the previously carried out consultation with the trade unions and business associations, as made mandatory in Article 27 of the Workers’ Statute Law. To determine the increase, key factors have been taken into account, such as the consumer price index, the average national productivity, the increase in the labor share in national income and the general economic situation.
In addition, the increase will have a semiannual review in the event that the price index projections are not met. In this way, the Government seeks to ensure that the IMW remains a fair and effective measure to protect workers and maintain their purchasing power.
One of the groups most positively affected by the IMW increase has been workers without a collective agreement. Fortunately, with the announced increase, these workers will be the most benefited, as their salary will be governed by the interprofessional minimum wage, and therefore, it cannot be lower than this.
However, it is possible that the IMW increase to 1,080 euros will not be reflected directly in the net payroll of workers. This may be due to the fact that, with a higher salary, the IRPF and other taxes such as the new Intergenerational Equity Mechanism (MEI) will be higher. This refers to a 0.6% increase in the Social Security contribution by companies and workers.
In conclusion, the increase in the Interprofessional Minimum Wage in Spain is an important step to protect workers and improve their purchasing power. However, it is important to take into account the possible negative effects, such as tax withholds and the new MEI.