EXPLAINED: How Spain plans to raise its minimum wage by as much as €250

The Spanish government is considering raising the minimum wage in 2021 by an amount which is yet to be confirmed, but which is expected to be between €50 and €250 more per month than the current base salary. Here’s what you need to know.

EXPLAINED: How Spain plans to raise its minimum wage by as much as €250
A delivery service worker in Burgos, Spain. Photo: Cesar Manso/AFP

What’s new?

Spain’s Labour Ministry has announced its intention to raise the Minimum Interprofessional Salary (SMI) in 2021 and has promised that its committee of experts will this month announce how much the minimum wage should rise over the next three years and at what pace.

Despite the ministry already having made the announcement, there are still many unresolved doubts among the group of experts as to exactly how and when this should happen. 

Spain’s current minimum wage is set at €1,108.3 gross per month. In reality, this equates to €950 a month, payable in 14 instalments to allow for the double monthly salary in July and December. 

Joaquín Pérez Rey, secretary of the State of Employment and Social Economy explained during a recent press conference: “The Spanish government has not abandoned the idea (of raising the SMI) and is waiting for the conclusions of the group of experts to be definitively produced… We trust that throughout the month of June, the commission will be able to give their opinion on what salary to set and the growth rate”.

How is the minimum wage calculated and how much would the new figure be?

According to a report by Vozpópuli, sources have told the news site that the committee of experts have found their task very difficult. Even a few weeks ago they had not yet been able to define what Spain’s average salary is and, therefore, what would be 60 percent of that average salary, to know how far the SMI should go up.

The process is complex, since neither the European Union nor The Organisation for Economic Co-operation and Development (OECD) has given guidelines on how to calculate what the mean or median wage for a country is.

The objective is that the minimum wage should reach 60 percent of the average wage in order to comply with the European Social Charter, but in order to achieve that objective it must first be defined.

Based on this percentage the amount could range between €1,000 and €1,200, but the figure hasn’t yet been officially confirmed.

However, most Spanish news sources have said that the initial minimum wage rise Labour Minister Yolanda Díaz is pushing for in 2021 would be of €50, up to €1,000. These plans have been in the pipeline for Spain’s left-wing government since 2019, the intention being to continue increasing el salario mínimo up to €1,200 by 2023. 

Opposition to raising the minimum wage

At the end of 2020, the Minister of Economy Nadia Calviño aligned herself with Spain’s top business people and managed to freeze an increase to minimum wage, until the economy could recuperate.

In fact, the Spanish Government did not include its intention to raise the minimum wage in its Recovery Plan sent to Brussels, even though Minister of Labour and Social Economy Yolanda Díaz recently insisted that these plans remain in place.

Given the refusal by businessmen to raise SMI, it seems difficult for the Government to approve this measure with everyone in agreement.

The Economic and Social Council (CES), Moncloa’s advisory body on economic and labor matters, has indicated in its Annual Report, published on Wednesday, June 2nd, that there is empirical evidence that increases in the SMI that are not consensual can generate a negative impact on a macroeconomic level. The same will happen if the minimum wage rises above 60 percent of the average salary of an economy.

“Historically there has been a negative impact on the economy when it has been adjusted abruptly and without an agreement,” warns Raymond Torres, director of Situation and International Analysis at Funcas and an expert appointed by the CES.

The last time Spain increased the minimum wage was in January 2020 when Spain’s new Socialist government brokered a deal lifting the minimum wage by 5.5 percent from €59.80 to €1,108 ($1,230) gross a month.

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Seven reasons to get Spanish nationality (and four not to)

If you’re a long-term resident in Spain, the question of taking Spanish nationality might have crossed your mind. So what are the pros and cons of acquiring Spanish citizenship through residency according to a foreign resident who has done just that?

Seven reasons to get Spanish nationality (and four not to)

The real and complete answer is extremely personal and complex. Nothing is certain in today’s roller-coaster times. And changing your nationality isn’t a step to take lightly.

It also takes time to obtain. However, to help you make a considered decision and to provide food for thought, Costa del Sol resident Joanna Styles outlines seven reasons why it’s worth taking Spanish nationality and four why it may not be.

Seven reasons FOR taking Spanish nationality:

1. You want freedom of movement

An advantage that many non-resident UK nationals in Spain are well aware of is that since Brexit they no longer enjoy the freedom of movement to live and work across the EU/EEA, having lost their EU citizenship.

Gaining Spanish nationality will give you plenty of choice and freedom in this regard, as becoming Spanish also means enjoying greater rights to live, work and travel where you please across 27 Member States, without having to worry about overstaying under the 90 in 180 days Schengen rule.

The Spanish passport is also one of the most ‘powerful’ in the word, allowing for visa-free travel to 190 different countries.

2. You don’t want to worry about time spent outside Spain

If you’re a naturalised Spanish citizen with a Spanish passport and ID, border officials are not going to keep tabs on your absences from Spain. 

Logically, if you’re thinking of applying for Spanish nationality, the idea is that you do so because you’re going to be in Spain long term. But at least you’ll have the peace of mind of knowing that you won’t lose the right to return if you have to leave Spain for some time.

Only foreigners who are not of Spanish origin but achieve nationality through naturalisation and who for a period of three years use their previous nationality (which they were supposed to have given up) risk losing their Spanish nationality.

 3. Spanish nationality is cheap and easy to renew

The price for applying for Spanish nationality is 104.05 € in 2022.

Spanish nationality documents (ID card and passport) do need renewal every 10 years, which on paper sounds time-consuming. But all you do is book an appointment at your nearest National Police station (and the online booking service works a treat), go along at your designated time and your documents are renewed in a few minutes. And it’s cheap – €12 for an ID card and €30 for a passport.

4. You want to vote

A sometimes inevitable part of a foreigner’s life in Spain is no participation or say in who governs your adopted country. Foreigners often find themselves in a voting limbo – how many Britons in Spain who had been living here for more than 15 years found they weren’t allowed to vote in the Brexit referendum? And they can’t vote in general elections in Spain either.   

This voting limbo changes when you take Spanish nationality and are permitted to vote in all the elections held in Spain. There is a disadvantage to this – Spanish nationals are obliged by law to do electoral duty if they’re picked in the random draw.

Electoral duty involves spending the entire Sunday at the voting station and staying for hours afterwards while you count the votes. It’s hugely difficult to get out of as well – barring death or very advanced pregnancy, it’s compulsory unless you pay a large fine (think several thousand euros). I’ve done my bit once and I have my fingers well crossed not to be called again.

5. You want easier paperwork

As any foreign resident in Spain will tell you, Spanish bureaucracy is notoriously fussy and time-consuming. While it has improved in leaps and bounds over the last couple of decades, becoming Spanish and having a Spanish ID card complete with microchip can make a difference, especially when it comes to legal processes. This means that if you get into trouble with the law, there’s no risk of you being kicked out of the country.

It’s also worth noting that you won’t have to go to the trouble of renewing your residency documents, proving earnings, time spent in Spain or any other requirement that foreigners can be asked for.

6. You want to give Spanish nationality and residency to family

If you’re a Spanish national your children under 18 have the option of obtaining Spanish nationality through patria potestad (parental rights), which isn’t subject to the same long periods of residency in Spain that most foreigners have to abide by for nationality through naturalisation.

If your spouse is not an EU citizen, they can also obtain residency in Spain easily because they’re married to a Spanish citizen and they won’t have to meet other stricter work or visa requirements. After a year, they can also apply for Spanish nationality.

It can also prove easier to grant Spanish residency to other family members such as parents or parents in law. 

7. You want to be a proper part of it

One of the main drawbacks of the life of a foreigner in Spain is that you’re a little bit out on a limb in terms of taking a full part in life in your chosen country. There’s definitely a sort of temporary status to being a so-called ‘expat’ and one way of making this more permanent is to adopt the country’s nationality.

After taking Spanish nationality and going ‘truly native’, I certainly feel more part of it, although at the same time, there are things about life here that I will never quite get or agree with. But maybe that’s because despite your new passport, deep down you’re always foreign.

On a light-hearted note, an additional advantage is that you’re more justified than ever to complain about life in Spain without getting disapproving looks from Spaniards. Once you’re Spanish, you have a legitimate excuse!

Four reasons for NOT taking Spanish nationality:

1. You don’t speak Spanish or know the culture

To obtain Spanish nationality you need to have a good level of the language and a pretty comprehensive understanding of Spanish culture. You need both of these because the process of becoming Spanish involves a formal exam with 25 multiple-choice questions on a wide range of aspects of Spanish life.

Expect to be asked about Spanish law, geography, history, institutional roles, climate and the obligations and rights of Spanish citizens. Some of these questions are challenging and obviously, they’re all in Spanish. And in true exam style, some of them are a little bit tricky (double-negatives, very similar answers etc).

There also a language exam you’ll have to sit, but this is a beginners A2 level Cervantes test.

2. You don’t want to renounce your own nationality

Maybe you feel you’re not ready to give up your passport. Obtaining Spanish nationality means giving up your own nationality unless you’re a citizen from most Latin American countries, Portugal, the Philippines, Andorra and more recently France, all of whom are allowed dual nationality. 

You don’t have to hand over your old passport when you obtain your Spanish ID papers – no one asked me for my British passport – but by law, you’re not allowed double nationality.

3. You don’t have the patience

Apart from the ten years of almost continuous residency in Spain that you have to prove (it’s five years in most European countries) keep in mind that it takes on average one to three years to obtain Spanish nationality after applying. 

If you don’t hand in the right documents, it could hold up the application even longer.

In Belgium, it takes four months to get a decision on your file on average and less than a year in the Netherlands but admittedly in other countries such as France and Italy it takes as long as in Spain. 

Either way, waiting up to 13 years to achieve Spanish nationality through residency is a very long time. 

4. You’re not ready to be a Spaniard

Becoming Spanish does involve an element of ‘playing the part’ so if you’re not prepared to jump in and become a true native, then it may not be worth taking Spanish nationality.

I took Spanish nationality over 15 years ago. My main reason for this was that I knew I was in Spain to stay. I also wanted to ‘join’ my husband and daughters who are all Spanish. I have never once regretted my decision and in the light of Brexit, I am very glad to have taken the step.

Joanna Styles is a freelance journalist and copywriter, based on the Costa del Sol where she arrived in 1989. She lives in Malaga, a city she is more than happy to call home. You can find out more about her work on Joanna is also the author of The 5 Best of Everything in Malaga, a comprehensive guide to Malaga with over 240 listings, and its sister website, Guide to Malaga.