The SMI of 1,000 euros, the first crack in the new tandem Díaz-Escrivá

• Appointment: José Luis Escrivá, new Minister of Social Security, Inclusion and Migration
• Sanchez. Social Security Limitation to not leave it in the hands of Podemos

The rise of the Minimum Interprofessional Salary to 1,000 euros this year promises to be one of the first sources of conflict that the new Coalition Government will face, where the difference in views between Podemos and the PSOE becomes apparent as it approaches the moment to summon the social agents to establish a negotiation.

Trade unions and businessmen await a call from the Government to reactivate an agenda that has been paralyzed for months and that has a rosary of reforms in perspective: from labor to pensions, through a new Workers' Statute. As a first point, however, is the SMI, for which they have not yet been summoned but waiting in the coming weeks. Yolanda Díaz will sit at the table in front of the unions and the employers' association as Labor Minister and José Luis Escrivá, from the Independent Authority for Fiscal Responsibility, as Minister of Social Security. Two very different points of view when assessing the consequences of the measure although a single competition, which will correspond to Diaz for his work portfolio.

The figure reached by the SMI may only be, also one. Of course, it will require one of the two sides to reverse . Unlike the rise proposed by Podemos and applied by Pedro Sánchez in December 2018, the Government undertook just one month ago to apply new increases in the SMI with the prior consultation process to employers and unions and with the horizon of reaching 60 % of the average salary in Spain at the end of the legislature. These are two conditions that qualify the commitment signed by Pablo Iglesias in his electoral program, which ensures an "immediate" rise of the SMI to 1,000 euros.

Although the setting of the minimum wage is the exclusive prerogative of the Government, the appointment with the social agents is practically obligatory since they are responsible for setting the tone of labor relations. The rise unilaterally announced by Sánchez in 2018 far exceeded the negotiations that had been carried out by companies and unions, which established 1,000 euros of minimum wage for this year only in the companies that agreed to it in agreement.

Díaz and Escrivá will meet some interlocutors who see this first measure of the Government from another perspective. An immediate legal minimum of 1,000 euros generates doubts in trade unions and more than doubts in CEOE, where Antonio Garamendi, its president, qualifies it directly as "barbarity . " Garamendi has warned on several occasions about the risk of slipping of the salary tables that supposes a strong upward pressure of the SMI. Within the bosses, they are also aware that in certain sectors where there has already been opposition to the minimum of 900 euros, such as the case of the agrarian, a judicial conflict can be unleashed because the increase is not applied in the agreements.

The union point of view has more nuances. Pepe Álvarez, general secretary of UGT has already indicated that raising the SMI in 2020 "would not be a problem" , although he has not explicitly committed to supporting 1,000 euros. As Unai Sordo, of CCOO, he has always preferred to point out the proportion of 60% of the average salary in Spain as the ideal balance of the SMI. They would be, according to Álvarez, 1,150 euros per month in 14 payments, 28% more than the current 900 euros, with an execution period set "at the end of the legislature", although the legislatures can be much shorter than their maximum of four years. Union sources admit that although "nothing has happened" because of the 22% increase in 2019, the consecutive escalation to 1,000 euros could "stress" a decelerating labor market.

With these approaches on the table, the fulfillment of the electoral promise of Podemos seems to be a risk that the Government plans to assume in the same way it did in 2018 and that has made the setting of this minimum remuneration that workers must receive by law foreign and that establishes the minimum contribution of the self-employed in one of Sánchez's most controversial decisions in economic matters.

The reason has not been to raise the SMI, but to do so by a proportion - 22% - that has strained a labor market that still has more than three million unemployed workers and that throughout 2019 was progressively cooling . The year ended with the slightest fall in unemployment since the economic crisis: only 38,700 unemployed less than twelve months before (-1.2%), an obvious slowdown when considering that 2018 closed with a year-on-year reduction greater than 6%

The differences face those who defend, such as Octavio Granado, Secretary of State for Social Security, which is a measure that will be studied in the future as an example of macroeconomic policy and those who point out that the decline in this labor bazooka is paid in the short term the profiles of the most vulnerable workers in sectors such as agriculture or the home in regions where wages are lower. In the long run, the perimeter of its negative consequences extends, as the Bank of Spain or BBVA Research have warned.

The new Minister of Social Security also issued a similar warning last year, coding according to his own estimates at 40,000 jobs that the measure could cost. On one of the few occasions in which he has reversed his position, Escrivá admitted last May that, contrary to what the AIReF studies had initially indicated, the negative effects he predicted were not observed . Of course, he did not rule out that this effect due to the rise to 900 euros would be produced "later" , which would complicate his approval to a new rise of 11% for this year. Although Labor is competent in this area, all indicators on its effects are recorded in Social Security. Interestingly, Escrivá already knows the 2019 data before promising his position as head of the ministry since Octavio Granado sent him a report at the end of last year in which he defended the measure, although he admitted the passage to the black market of 13,000 domestic employees and the loss of hours of work computed in the agricultural sector as compensation for the rise applied.

“We have improved Social Security revenues through contributions thanks to a general boost in wages, which means generating a boost for the economy. The entrepreneurs must be reminded that if they do not raise their salaries, they cannot expect higher household consumption either and that for the economy, among which are their companies, that means staying in the crisis ”, they defend in Social Security .

On the opposite side, the Bank of Spain has been the one most openly faced with what it considers a measure that will take its toll on the labor market and job creation. The financial and macroeconomic supervisor saved euphemisms and assessed the measure as "negative" in February. Óscar Arce, its director of Statistics was ratified in June to confirm his conviction that "with little doubt" the measure will end up having a negative impact on employment. "

According to the criteria of The Trust Project

• Social Security
• We can
• José Luis Escrivá
• Spain
• Yolanda Diaz
• UGT
• Pedro Sanchez
• Pablo Iglesias
• PSOE
• CEOE
• CCOO
• minimum salary

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