Spanish unions UGT and CCOO demand 7% minimum wage hike to €18,300

Unions seek €18,300 minimum wage as metal sector lags behind

The proposal by UGT and CCOO to increase the interprofessional minimum wage (SMI) by 7% in 2027, reaching €18,284 gross annually, has peine the divide between those earning the SMI and those paying payroll taxes. The figure, presented on October 13, 2026, ahead of the November 11 general strike, far exceeds Banco de España's forecast of 3.7% inflation for 2027. Yolanda Díaz's government aims to approve the raise effective January 1 before the November 29 elections.

The issue is not the number itself, but the domino effect. According to calculations circulating among debate participants, while the SMI has risen 65% since 2018, collective agreements in sectors like metalworking have advanced only 30% in the same period. This creates a squeeze on qualified workers: a newly graduated engineer starting at €24,000 gross sees their office cleaner's salary dangerously approaching theirs. The uncomfortable question remains: who will pursue higher education if the wage differential disappears?

The calculation no one wants to make: €85 more per month

With the SMI paid in 14 installments, the union proposal means €85 more per month for affected workers. A 7% increase that, according to unions, compensates for accumulated loss of purchasing power. The government approved a 3.1% rise in February 2026, below final inflation for that year. The correction arrives late and during an election campaign.

The Ministry of Labor's expert committee will present its range within three weeks. UGT and CCOO did not wait. They put the figure on the table and linked the increase to the November 11 general strike under the slogan "wages, housing, prices." Meanwhile, employers' associations have not convened the AENC negotiating table. Antonio Garamendi suggested last week that the strike might be illegal for mixing labor demands with the housing crisis.

Metal wages rose half as much as SMI: the unexamined gap

A key data point circulates widely: in the metal sector, wages have increased 30% since 2018, while the SMI rose 65%. The consequences are twofold. First, collective agreements lose appeal compared to the legal minimum. Second, companies use absorption and offsetting clauses to eliminate bonuses whenever the SMI rises. CCOO has requested limiting this practice via decree-law, a method the government already used for housing legislation.

The business argument is simple: if the SMI rises, labor costs rise, and someone must pay. The union response mirrors this: companies accumulate record profits. In between, qualified workers see their negotiated salaries frozen while the legal minimum catches up. The result is leveling down that drains incentives for training.

Chicken at €3.50 and tomatoes at €2.60: shopping basket as thermometer

The SMI increase isn't debated abstractly; it's discussed at the supermarket. Some claim roasted chicken costs around €3.20-3.50 per kilo, while others cite €8.45 for breasts and €4.15 for wings. El Perelló pink tomatoes sell for €2.60 per kilo in some markets, yet some pay over €4 for salad varieties. Inflation is not uniform; it depends on the neighborhood, chain, and day.

What is uniform, according to some participants, is the pull effect. It is argued that a higher SMI attracts immigration willing to accept any job, pressuring down wages for the least qualified. This thesis, attributed to an author in the debate, holds that the SMI was invented precisely to protect native workers from unfair competition. If jobs weren't so poorly paid, employers wouldn't need to import labor willing to do anything.

The productivity trap: the engineer and the cleaner

The example repeats: in an engineering firm, the new graduate earns the same as the person who cleans. Moreover, the cleaner is more productive in the first months. The engineer needs training, experience, and time to generate value. Cleaning generates immediate value. If the SMI equalizes both salaries, the incentive to study vanishes.

The counterargument is equally strong: the cleaner also deserves a living wage. The SMI is not an educational incentive tool but a floor of dignity. The problem isn't that cleaning pays more, but that engineering pays less. The solution isn't lowering the SMI, but raising skilled wages. Let companies compete for talent, not precarity.

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The SMI is non-garnishable. This means its increase complicates debt collection and spikes interest rates on loans and mortgages, according to one participant. It's a rarely mentioned side effect. With public debt at highs and the ECB watching, the measure may carry hidden costs no one has calculated. The prediction, with reservations: if the SMI rises 7% and agreements don't trinc, the gap between qualified and unqualified workers will keep closing. Until the system stops rewarding effort. Then, the problem won't be the SMI. It will be that no one wants to be an engineer.