Standard & Poor's sees margin to go up this year the minimum wage

The rating agency Standard & Poor's has highlighted this Wednesday that in Spain there is still some room to increase this year the minimum wage. Director of r

Standard & Poor's sees margin to go up this year the minimum wage

The rating agency Standard & Poor's has highlighted this Wednesday that in Spain there is still some room to increase this year the minimum wage. Director of ratings, sovereign, Marko Mrsnik, has pointed out that part of low levels in comparison with the rest of Europe after years of wage freeze until 2019. However, it has been clarified that the increase raises the Government of Sanchez to the legislature could be too. The new Executive has pledged to increase that to 60% of the average wage in the legislature, which could mean an increase to the environment of the 1,200 or 1,300 euros per month in 14 payments, depending on how you calculate the average salary. Would imply an increase of SMI in five years is quite substantial from the 735,9 euros that was in 2018. “Not,” said Mrsnik.

"The increases in the minimum wage are a complex topic and that can have positive impact if they are gradual and in line with the economic situation. If they are very significant and quick might harm the employees of low qualification and productivity, that is to say, to which in principle should help. In addition, it could erode the gains in competitiveness achieved in recent years and generate more employment dipped", explains Mrsnik after the press conference to THE COUNTRY. And adds that, given the increase raised in a legislature, and Spain would be placed at the same levels as France and well above that of Portugal.

The director of ratings, sovereign S&P has stated that lead the Spanish labour legislation to the situation before the reform of 2012 may harm the credit rating. However, the following has pointed out that there is still to see the detail to analyze in what will consist the changes advocated by the Executive of Sanchez. “If the reform moves forward along the path of providing solutions to the high unemployment, the high temporality and precariousness, then you could return the confidence to the consumer and increase the potential of growth” - has underlined Mrsnik.

MORE INFORMATION

Government, employers and unions have to agree to a raise in the minimum wage, The Bank of Spain says to raise the minimum wage will not help low income The agreement of the PSOE-United we Can for a coalition Government, in full

This ambivalence of the S&P seems to respond to the different voices that have been heard in employment in the latest dates. The ministries of Employment and the Economy have put the accent on different points. The first puts the emphasis on repeal of the reform of the PP. The second on creating a new statute of the worker to modernize labour relations, and to end with the temporality and the most harmful of the reform of Rajoy.

Mrsnik explained that in recent years have been approved labor reforms in Spain, France and Italy. In the first two has led to the collective bargaining to the company, and this has contributed to generate more employment. In France the labour market is showing more dynamic since the reform, has pointed out. In contrast, who applied a Matteo Renzi in Italy have not moved the bargaining to the company level, and the italians follow with a labour market that is anemic. For these reasons, the director of ratings, the sovereign Standard & Poor's has said that “it would be a backward step if it returns the collective bargaining at levels above the company.” Suppress the priority of the covenant of the company, and to reinforce the reasons for the lift in salary are listed in the points of agreement between PSOE and we Can to form a government.

In terms of the public deficit, Mrsnik has highlighted the fact that Spain alone what is coming down by the economic cycle and that a good part of this gap in budget is due to the hole of pensions. “The structural deficit is still high and is not reduced. Other countries, such as France or Italy are in a similar situation,” he recalled. Among the weak points, S&P believes that the political uncertainty could restrict the ability of the Government to make reforms to lower the deficit of the pension and to strengthen the long-term growth. In exchange, the u.s. agency is not concerned that it is delayed in the approval of Budgets.

Updated Date: 22 January 2020, 22:00

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