What will be the Minimum Wage in 2023 and how much will the SMI rise next year

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The economic storm clouds, including the growth slowdownwill not prevent the contributory, non-contributory pensionsof Passive Classes and the Minimum Vital Income (IMV) rise by at least 8.5% in 2023, based on the commitment to match them with the rise in the Consumer Price Index (CPI) included in the pension reform led by the Minister of Inclusion, Social Security and Migration, Jose Luis Escriva. Meanwhile, the rise of Interprofessional Minimum Wage (SMI) is still up in the air, with different proposals and estimates, and awaiting the report of the Advisory Commission for the Analysis of the SMIthe experts on this matter who should have their recommendations ready in a couple of weeks.

This committee, which includes professors, economists and experts in labor and business matters, presented a report last June 2021 detailing the way in which the Minimum salary and it did so just one year before the 3.15% increase in the average salary in 2020 was announced, up to 25,165 euros per year in 12 payments, according to the Salary Structure Surveyl (EES). This reference increase indicated that it would be necessary to increase the SMI in 2023 by 1,092 euros per year or what is the same, 78 euros in 14 payments from the 1,000 euros in force in 2022. After three months of analysis and discussions it was decided that the best formula to determine the average salary was the EES, with great advantages, but also with some handicap, especially the delay in its publication.

The Commission pointed out that statistics were needed that offered the average net salary for a worker full time, versus other options such as median salary or gross compensation. No official source is perfect, he pointed out, after analyzing the INE’s Quarterly Labor Cost Survey (ETCL), the Compensation of employees of the Quarterly National Accounts (CNTR) of the INE, the Annual Labor Cost Survey (EACL) of the INE, the Wage Structure Survey (EES) of the INE in its two aspects (annual and four-year), the subsample of the Population Survey Active of the INE, the tax sources of the AEAT and the Continuous Sample of Working Lives (MCVL) of the Social Security.

The experts proposed a rise fork to place the SMI in 2023 between 2,011 and 2,048… but the average salaries rose more than expected

How much will the Minimum Wage rise in 2023?

In the report -without knowing the increase in the average remuneration for 2020- a SMI rise fork between 6.4% and 10.4% until 2023, which would mean increasing the SMI by between 61 euros and 99 euros – at that time 950 euros. In the first case it would have remained at 1,011 euros in 2023 and in the second at 1,048 euros, the amount that the vice president was considering until not long ago Yolanda Diaz “to face an inflation unknown since the 20th century. At that time, a rise in the average salary of 0.9% was estimated for the lowest increase in 2020 and for the highest rise of 1.8%, but finally it rose 3.15%

What statistic is used to determine the SMI

The experts decided, among a good number of statistical options, to use the ESS of the Statistics National Institute (INE) to determine the average salary. Among the advantages, he pointed out that it is the only operation that allows the necessary discounts to be made to obtain a salary net of social contributions and personal income tax and to eliminate payments in kind and for overtime that are not part of the Minimum Interprofessional Salary. In addition, he stressed, it is one of the statistical sources most used by institutions and organizations to make international comparisons, and its large sample guarantees an accurate estimate with low error.

[21/10 17:11] Enrique Morales-Sequera

Among the cons, he pointed out that this statistical operation has the handicap of not including certain sectors, such as primary, domestic service or civil servants. Passive Classes, which could bias the estimate of the average salary “without being able to conclude the meaning of that deviation”. In addition, it highlighted that the statistics are published with a significant delay and at that time, June 2021, the latest estimate corresponded to the year 2018 and its annual version for 2019 would not be available until the end of June of this year. “This requires establishing estimates based on forecasts that, as in the year 2020, and given the existing uncertainty, must be viewed with caution,” he stressed. And indeed, the average salary increase was less than expected.

Source: lainformacion.com

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