Entrepreneurs advance adjustments of staff and more submerged economy by the rise in the minimum wage

Employers say that the rise in the minimum wage (SMI) has already destroyed employment among those under 25, and they warn that they will be forced to


Macroeconomy

The Minister of Labor, Magdalena Valerio, in the Congress of Deputies. ANTONIO HEREDIA

John de Zulueta: "This Government of 84 deputies is funny, it is better not to approve the Budget"

BBVA Research increases the impact of the rise of the SMI to more than 300,000 long-term destroyed jobs

The Bank of Spain warns that the minimum wage increase will end with 125,000 jobs

Employers say that the increase in the minimum wage (SMI) has already destroyed employment among those under 25, and warn that they will be forced to make staff adjustments as a result of the increase of the SMI to 900 euros agreed by the Government of Pedro Sánchez and Podemos. " Yes, it has already been noticed that it affects young people without training . There is a clear and early evidence that companies have to adjust the templates, "said yesterday the president of the Circle of Entrepreneurs, John de Zulueta, during the presentation of the tough position before the draft Budget that this organization carried out .

This document states that the total destruction of posts only during the current year will be 40,000 and 125,000 positions, which are the figures estimated by the Spanish Independent Authority of Fiscal Responsibility (AIReF) and the Bank of Spain, respectively.

To this, the Business Circle adds that the rise of the SMI will encourage irregular hiring and the underground economy , which in Spain is already at "17.5% of GDP and represents a loss of public income of approximately 25,000 million euros annuals ", and that will cause the" increase in inequality ". This last point is explained, according to the organization, because "unemployment accounts for 80% of the levels of inequality", so "less job creation does not favor their reduction given the current context of economic slowdown."

In this way, the association chaired by De Zulueta adds to the numerous warnings of the negative implications that the increase of the SMI will have, while rejecting the hard to believe figures that the Ministry of Finance has projected. «Analyzed the PGE 2019, the Businessmen Circle reiterates its estimate that there is a negative lag of the total budgeted revenues of around 10,000 million euros, which coincides with the recent estimates of the Bank of Spain (8,500 million euros) and the AIReF (11,000 million) », he assures.

The Circle also criticizes the excessive effort that is asked of the companies; the "short-term"; the "uncertainty" generated by the accounts; and the fact that economic growth is wasted "to reduce the deficit and carry out efficiency measures in spending".

With these arguments, employers not only reject frontally the accounts prepared by the Executive of Sanchez, but affirm that the last ones approved by the Government of Mariano Rajoy "are better" and also request that general elections be called "as soon as possible". " A government of 84 deputies in need of the support of an anti-system party and of the pro-independence party serves to overthrow another government, but not to govern, " De Zulueta said, in line with what he had already pointed out in the interview given to this newspaper. "Sanchez promised elections after the motion of censure flourished and we have waited a long time since then," he said.

Garamendi demands political stability

For his part, the president of CEOE, Antonio Garamendi, also claimed stability yesterday for Spain since the economy is at a time " not of recession, but of economic slowdown ." However, unlike the opinion of the Circle, the president of the employers was not sure that the electoral advance that Sanchez could decree is the solution to end the "political instability". "I do not know if an election will give more stability, hopefully," said Garamendi.

What he did agree with is his negative view of the draft Budgets, since in his opinion "he will spend more than he should" and " it is not time to spend more than we should ". "We think it would be better if these Budgets were more moderate or had more budgetary rigor, but" is the Parliament that has to say and we will see what it says, "he said in statements collected by Europa Press.

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REF: https://www.elmundo.es/economia/macroeconomia/2019/02/12/5c6179ed21efa0ef278b45f4.html