Spain's government plans to raise minimum wage by 4% -source

Spain's government aims to increase the minimum wage by 4% in 2024, above an initial offer of 3.5% from employers, according to a senior government source.

The government is currently negotiating with unions and representatives of employers over the increase and an agreement is expected to be announced in December.

Lower-than-expected annual inflation of 3.2% in November has eased pressure on salaries in Spain, which had increased the minimum wage in 2023 by 8% for a monthly salary of 1,259 euros ($1,373) to compensate for annual inflation of 8.2% in 2022.

Unions and employers have already agreed on a 3% increase for all wages for 2024, with an extra 1% should inflation in 2023 end above 3%.

The government said in a statement on Wednesday that pensions will rise by 3.8% next year, matching a 3.8% average annual rise in inflation through November 2023.

The newly sworn-in coalition government is divided over plans to reform the unemployment benefits system, a condition set by the European Union for the disbursement of 140 billion euros assigned to Spain as part of the post-Covid recovery plan.

Labour Minister Yolanda Diaz, who is also leader of coalition junior partner Sumar, wants to increase benefits for the unemployed, while Economy Minister Nadia Calvino of the Socialist Party, wants a reduction.