Feijóo warns Spain's minimum wage hikes risk harming jobs

Feijóo challenges Spain's minimum wage: is it hitting a ceiling?

Imagine an unskilled construction worker who performs poorly yet earns nearly as much as a skilled veteran with years of experience. This scenario, described by an employer, encapsulates the contradiction of Spain's minimum wage (SMI): when it rises, it affects everyone regardless of productivity. According to PP leader Alberto Núñez Feijóo, this approach has limits. In statements that have stirred economic debate, Feijóo warned that continuing to increase the SMI without damaging employment and competitiveness is unsustainable. The controversy is live, and the data does not help calm tensions.

Why does Feijóo say enough?

The core argument is that successive SMI increases—from €735 in 2018 to €1,134 in 2024, with further hikes planned—have compressed wage differentials. Critics argue this discourages training and effort, as low-qualified workers earn almost the same as experienced or educated ones. They contend this leads to lost productivity, weighing down the entire economy. This is not an isolated opinion; social media and media reports highlight companies unable to pay top performers more because the minimum wage consumes their budget.

Inflation erodes supposed gains

Opposing views defend raising the SMI to maintain purchasing power. Data partially supports them. Discussion figures indicate Spain's annual inflation in 2026 was 3.2%, compared to France's 1.8%. Thus, despite nominal SMI increases, real wages have not improved significantly. A common remark is that €700 in 2016 had more buying power than €1,200 today. The conclusion: failing to raise the minimum wage reduces workers' purchasing power; raising it makes some employers claim they cannot afford it.

Productivity: the elephant in the room

The true crux of the debate is productivity. Spain has stagnated in this indicator for years. Many analysts point out the key lies not in the SMI but in productive structure: low R&D investment, a business fabric dominated by small, low-value-added firms, and high temporary employment rates. Raising the SMI in this context may be counterproductive without structural reforms. Some recall the EU directive setting the minimum wage at 60% of the median wage, a target Spain has already exceeded in some segments, creating tensions.

Meanwhile, talent flight continues

A striking data point: engineers and qualified professionals are leaving Spain. The recurring complaint is that they earn nearly the same as unskilled employees here, whereas in Germany the gap is vast. The paradox is that those advocating higher SMI for the least trained witness the exodus of the most trained. The equation doesn't add up, and the debate remains open.

With these elements, Feijóo's warning is not merely electoral rhetoric but the tip of an iceberg representing a structural problem. While Spanish inflation doubles French levels and productivity fails to take off, the fundamental question remains: how much can we raise the SMI without breaking the labor market? For now, no one has the answer.