The rise in the minimum wage (SMI) to 900 euros per month in 14 payments per year last year has meant that the employment rate grows "less than it could have done." According to the calculations of BBVA Research, the study cabinet of the bank, the impact of this measure during 2019 has subtracted four tenths from employment growth, which means about 45,000 new jobs that have stopped being created.
Jorge Sicilia, director of the organization, explained during the presentation of his report 'Situation Spain' that this impact will be "increasing" over time, that is, the effects will continue to be noticed in the coming years in the sectors that are most linked to these salaries, such as commerce and hospitality. Their numbers indicate that in these groups the number of contributors increased by 2.8% in 2019, one point less than in the 2017-2018 average. In the rest of the groups, the slowdown in growth was lower, around six tenths.
And all this without considering that the SMI will probably come back up again, until reaching 1,200 euros in 2023, as indicated by the Government agreement signed before the investiture between the PSOE and United We can. For Sicily, this goal of reaching 60% of the average salary has "all the sense in the world", but that change will have to be done "slowly enough" so that companies and employees can adapt to this new environment.
The occupation grew by 400,000 people in 2019, about 90,000 less than the previous year
In this sense, the president of the employers' association (CEOE), Antonio Garamendi, warned this Tuesday of the "damage" that has caused the rise of the SMI by 22%. In his opinion, a total of 60,000 people work in black (15,000 employees of the household and 45,000 in the field) for this increase that has "triggered" the submerged economy. "There is a lot of talk about emptied Spain but you don't think about it when you legislate on the SMI," he said.
The consumption and savings of families grows
Despite this fall in job creation, Miguel Cardoso, chief economist for Spain at BBVA Research, assumes that in the first half of 2019 there was an increase in income, which is partly due to the rise in SMI. Until now, it has been observed that the savings of families have increased and it will be necessary to observe whether they can be moving to consumption, he explained.
The agency's forecasts regarding job creation is that its pace will lose traction in 2020. The unemployment rate will continue to fall, but at a much lower rate than in 2018 and the first part of 2019. They estimate that 2020 ends at 13.5% and goes down to 12.5% in 2021, which means one and two tenths less respectively than expected by the cabinet only three months ago. In 2019 the occupation grew around 413,000 people, 90,000 less than in 2018 despite the rebound of the active population in more than 200,000 people.
Maintain the GDP growth rate
On the side of Spain's economic growth, the best international context "paves the way" towards a stabilization of GDP, which could cause the slowdown to "stop" in 2020, with a GDP that will slow down to 1.6% this year, according to their calculations, and that there will be a "moderate acceleration" in 2021 to 1.9% at the end of 2021 due to the improvement of the European economy.
The change in trend in the evolution of the Catalan economy since the second half of 2017 has meant "a drag" on the country's overall growth
Rafael Doménech, responsible for Economic Analysis, said that the loss of traction in the second half of 2019 (0.4% of GDP) was "less intense" than predicted three months ago by his cabinet, caused by household consumption that keep going up and for a export improvement, which will be "the engine" of economic activity in the first quarter of 2020.
In his opinion, the good progress of the Spanish economy depends on how the external and internal sources of uncertainty that are still open are resolved. On the one hand, the commercial war and the 'brexit', although he clarified that the risks are being diluted. "So far, the rise in US tariffs on European products has had an impact of four tenths on Spanish exports, we are confident that it will not go further," said Doménech.
And on the other, tensions with Catalonia are defined as a focus of "limited and temporary" uncertainty. From the cabinet they assure that the change of tendency in the evolution of the Catalan economy since the second semester of 2017 has supposed «a ballast» for the general growth of the country.
. (tagsToTranslate) increase (t) minimum wage (t) (t) subtraction (t) 45000 (t) new (t) jobs (t) according to (t) bbva