Charlie Smith
THE governor of the Bank of Spain has blasted Prime Minister Pedro Sanchez’s proposals to increase minimum wage over job loss fears.
Pablo Hernández de Cos claimed the 22% increase in minimum wage proposed by Sanchez’s minority Socialist (PSOE) government would result in 150,000 job losses.
A total of 0.8% of Spain’s labour force could be at risk of redundancy warns the governor, who claims that the evidence available shows that minimum wage increases always have a ‘negative effect.’
He said: “The increase in the minimum wage in small amounts has little effect, but we have few experiences of high rises, none of 22%.”
When Sanchez unveiled his 2019 budget proposals last month along with Pablo Iglesias, the Podemos leader, who supports his minority administration, the minimum wage increases were the most striking change.
Sanchez’s government proposed an increase of €164.1, boosting Spanish monthly minimum wage from €735.9 to €900.
The proposals, which the Bank of Spain governor alleges would create ‘job loss and increased inequality,’ constitute the highest minimum wage percentage increase since 1977.
Why can’t the left wing see that to increase minimum wages has several detrimental effects. Prices rise because the increase is passed on to the consumer, wages increase generally as those above the minimum want the differential restored, low paid workers loose their jobs when employers cannot afford the increase or loose custom when they have to increase prices.
The minimum wage is an essential starting point, without which, cruel unfairness becomes the minimum wage.
The Tories in the UK have recently increased the minimum wage, or, having stolen the idea, now call it “The Living Wage” – Hah! Before the Minimum was introduced, it was common to see ads. for security patrol men, offering £2.50 per hour, stipulating “own dog and transport required”
If an employer cannot afford the Minimum, then they do not have a viable business. Even Henry Ford (no Socialist he!) realised he would not be able to flog his Tin Lizzies if the workers couldn’t afford them. His assembly workers thus became some of the best-paid manual workers around, being then a pattern for many other successful Capitalist projects. The absolute logic of a free-for-all, race-to-the-bottom on pay, leads inevitably to slavery.