THE governor of the Bank of Spain has blasted Prime Minister Pedro Sanchez’s proposals to increase minimum wage over job loss fears.
Pablo Hernández de Cos claimed the 22% increase in minimum wage proposed by Sanchez’s minority Socialist (PSOE) government would result in 150,000 job losses.
A total of 0.8% of Spain’s labour force could be at risk of redundancy warns the governor, who claims that the evidence available shows that minimum wage increases always have a ‘negative effect.’
He said: “The increase in the minimum wage in small amounts has little effect, but we have few experiences of high rises, none of 22%.”
When Sanchez unveiled his 2019 budget proposals last month along with Pablo Iglesias, the Podemos leader, who supports his minority administration, the minimum wage increases were the most striking change.
Sanchez’s government proposed an increase of €164.1, boosting Spanish monthly minimum wage from €735.9 to €900.
The proposals, which the Bank of Spain governor alleges would create ‘job loss and increased inequality,’ constitute the highest minimum wage percentage increase since 1977.