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Spain raises minimum wage, adding to 2019 hike

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Mr Sanchez' new administration, which has the support of radical leftist party Podemos, has also announced a 0.9 per cent increase in pensions and a 2.0 per cent increase in wages of civil servants.

[MADRID] Spain's new Socialist government under Pedro Sanchez on Wednesday brokered an accord with unions and bosses lifting the minimum wage 5.5 per cent or 598 euros to 1,108 euros (S$1,660) gross a month.

"We have reached agreement to lift the minimum wage this year," said labour minister Yolanda Diaz, hailing a "very happy day for democracy in this country and for all workers."

The cabinet is due to approve the measure within days upon which the rise will take immediate effect.

Mr Sanchez' new administration, which has the support of radical leftist party Podemos, has also announced a 0.9 per cent increase in pensions and a 2.0 per cent increase in wages of civil servants.

While unions saluted the minimum wage rise the president of the Confederation of Employers' Organizations, Antonio Garamendi, admitted that "we would have liked (the rise) to be a little lower," even if the figure agreed was below an initially mooted 1,167 euros.

The latest rise comes on the back of Mr Sanchez's pushing through of an unparalleled 22 per cent hike last year.

The government has pledged over the coming four years to lift the level to 60 per cent of the current average salary of 1,970 euros - which would be currently 1,182 euros.

Speaking at the Davos forum earlier, Mr Sanchez said his government would still pursue "fiscal rigour" in targeting cutting the national deficit and public debt.

Spain's move comes weeks after Britain's conservative government pledged to increase the minimum wage by more than four times the rate of UK inflation from next year despite a warning by the British Chambers of Commerce that above-inflation pay increases could hit business amid economic uncertainty with Brexit days away.

AFP