Observation (CEACR) - adopted 2012, published 102nd ILC session (2013)

Minimum Wage Fixing Convention, 1970 (No. 131) - Spain (Ratification: 1971)

Article 3 of the Convention. Elements to be taken into consideration in determining the level of minimum wages. The Committee notes the observations made by the Trade Union Confederation of Workers’ Commissions (CC.OO.) and the General Union of Workers (UGT) in communications dated 13 and 31 August 2012, respectively. It notes that, according to the CC.OO., the purchasing power of the interoccupational minimum wage (SMI) has been decreasing every year since 2010 and the SMI has corresponded to an increasingly small proportion of the average wage since 2007. The CC.OO. recalls that the Spanish minimum wage is one of the lowest in the “EU15”, without this situation being justified by differences in hourly productivity levels. It considers that the economic crisis cannot be used as a pretext for abandoning the objective of attaining a minimum wage corresponding to 60 per cent of the average wage, which is the percentage considered to be fair in the context of implementation of the European Social Charter. The CC.OO. is asking the Government to restore the loss in purchasing power of the SMI which has been recorded since 2010 and is calling for a reform of section 27 of the Workers’ Statute in order to establish new criteria for fixing the amount of the SMI on an annual basis. The Committee further notes that the UGT refers in its observations to the loss of purchasing power of the SMI since 2010, and the freeze of the amount of the SMI in 2012, as well as the increased gap between the SMI and the average wage.

The Committee notes that, in its reply to the observations made by the CC.OO. and the UGT, the Government provides information on the evolution of the SMI, the consumer price index (IPC) and the gross average wage between 2006 and 2011. The Government points out that, by virtue of section 27 of the Workers’ Statute, the amount of the SMI is determined not only on the basis of the IPC but also other factors such as national average productivity, increased worker participation to the national revenue and the general economic environment. The freeze of the SMI for 2012 followed a period of six years of increases beyond the increase of the IPC but this tendency could no longer be maintained because of the economic crisis. Despite the small number of workers receiving the SMI, an increase of the minimum wage by 1 per cent has an impact of €57 million on the State budget because of the direct link between the amount of the SMI and the reference base for calculating social security contributions. Such an increase also results in an increase of the expenditure of the Wage Guarantee Fund by €3.066 billion and an increase of the expenditure related to unemployment benefits by €17.3 million.

The Committee notes that in its report on the application of the Convention, the Government also provides information on the evolution of the SMI since 2008, indicating that, at the time of the increase of the SMI in 2011, account was taken in particular of the economic recession and the need to pursue a moderate wage policy with a view to contributing to economic recovery and job creation. The Government also refers to a resolution adopted on 30 January 2012 by the Directorate-General of Employment, which registers an agreement for employment and collective bargaining for 2012–14 concluded by the Spanish Confederation of Employers’ Organizations (CEOE), the Spanish Confederation of Small and Medium-Sized Enterprises (CEPYME), the CC.OO. and the UGT. This agreement provides, inter alia, for wage moderation in collective bargaining and defines the criteria to be used for this purpose.

Furthermore, the Committee notes that the European Committee on Social Rights considered in 2010 that the situation in Spain was not in conformity with the European Social Charter on the grounds that the minimum wage was clearly unfair, based on the statistical information published by the Organisation for Economic Cooperation and Development (OECD), according to which the SMI corresponded in 2010 to 35 per cent of the average wage for full-time workers. It further notes that Royal Decree No. 1888/2011 of 30 December 2011, fixing the interoccupational minimum wage for 2012 has maintained the amount of the SMI at the same level as that which was in force in 2011, as confirmed by the Government. This decision was justified, according to the preamble to the Royal Decree, by the economic context which made it preferable, for 2012, to adopt wage policies contributing to the priority objective of economic recovery and job creation.

While being fully aware of the major economic difficulties currently faced by Spain, the Committee considers that the fixing of minimum wages in concertation with the social partners and enabling workers to meet their needs as well as those of their families is a key element for decent work, particularly in periods of economic and social crisis. It refers, in this regard, to the Global Jobs Pact, adopted by the International Labour Conference in June 2009 in response to the global economic crisis, an instrument which underlines the relevance of ILO instruments relating to wages in order to prevent a downward spiral in labour conditions and build the recovery (paragraph 14). The Pact also suggests that governments should consider options such as minimum wages that can reduce poverty and inequity, increase demand and contribute to economic stability (paragraph 23), and it provides that, in order to avoid deflationary wage spirals, minimum wages should be regularly reviewed and adapted (paragraph 12). The Committee hopes that the Government will endeavour to take full account of the needs of workers and their families, and not just the objectives of economic policy, when undertaking the annual adjustment of the minimum wage in future, avoiding depreciations in the purchasing power of the SMI, and that it will fully involve the social partners, on an equal footing, in decision-making in this field.

Finally, with regard to the relationship between the SMI and social security contributions or benefits, the Committee had noted in its previous direct request that, by virtue of section 1 of Royal Legislative Decree No. 3/2004 of 25 June 2004, the SMI no longer served as a basis for calculating certain social benefits and had been replaced to this end by the public indicator of multiple effect income (IPREM). The Committee requests the Government to provide additional explanations on this point, in the light of the information that it has communicated concerning the budgetary impact of minimum wage increases.