Economy News

A third of companies in Spain foresees layoffs


One in three companies in Spain (32%) say that this year’s minimum wage increase of 1.6%, 15 euros per month, will result in layoffs of part of the workforce. In a survey conducted by Infojobs after learning of this agreement between the government and unions, 19% of companies predicted layoffs in response to an increase in the minimum wage prior to the pandemic, thirteen points less than what actually happened.

In addition, the survey reflects the reluctance of companies to approve the new increase: almost half of companies with fewer than 50 employees refuse to accept it, while 44% believe it will result in less hiring; in addition, 50% believe the increase will affect salary reviews.


At the time, the CEOE president, Antonio Garamendi, said that the decision to raise the SMI as of September 1 “had already been made” and that the Government “had only been able to turn it around on its own.”. Moreover, he maintains that it is a political decision, and not a serious one.

” At other times, we have raised the SMI, but it has risen 30% since last year. With the one that is falling, the pandemic, it is a very delicate moment,” he said.

The governor of the Bank of Spain, Pablo Hernández de Cos, calls for “prudence” ahead of the increase of 15 euros agreed between the government and the unions on September 1. “We know that moderate increases in the SMI can negatively affect employment albeit more so for groups that have a low productivity level, young adults, or those older than 45 years of age,” he said. The economist however warns of a rise in the current moment, in which the “recovery is firm, but heterogeneous”, as it is being slow precisely in sectors “where the incidence of the SMI is high, such as services or SMEs”.

A ‘minor’ increase
Yolanda Diaz, the second vice-president of the Government and Minister for Labor and Social Economy, remarked her “satisfaction” with an agreement signed with the unions, while also mentioning pending reforms. Diaz called on the Spanish employers’ association to “get resolute” because “sometimes, by not negotiating, we lose”.

” I am not sure if I have said it clearly, but not negotiating is losing. You know that the Minister of Labor was willing to agree to a lower amount than what we have today. Sometimes you lose by not agreeing,” the minister explained.


Michelle D. Madsen

Michelle D. Madsen graduated from the University of Westminster and has been deeply involved in the world of finance ever since. She has worked as a Broadcast Journalist hosting various news shows and informative webcasts about the financial markets. Since 2004 she has also been writing for Metanews daily, her attention to detail, and her in-depth knowledge of the financial markets have led her to cover Foreign Exchange and commodities. The world of finance has changed in the last few years with the introduction and rising popularity of cryptocurrencies. She has in no means been left behind, adding this to her bank of intellect and is now also an expert in cryptocurrencies. For the last ten years, Ms. Madsen has been engaged in the financial market. She has notedly written a great number of incredibly informative reviews for the crypto exchange and forex brokers. Her wealth of knowledge has enabled her to become a leading expert in the field. She continues to inform the public writing up-to-date, thorough reviews for the readers of Metanews as she has for the last decade.
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