OVIEDO, Spain

Spain will increase its minimum wage by 3.6% to €14,000 ($16,000) per year, the country’s Labor Minister Yolanda Diaz announced on Wednesday.

This will be the fourth time Spain has raised the minimum wage since 2019.

In 2018, the country’s minimum wage sat at €10,302 ($11,780) per year – nearly 27% lower than it will be in 2022.

“Far from what has been theorized by opponents, the increasing minimum wage has been good for Spain and its economy,” said Diaz. “It improves people’s lives, reduces poverty and drives up wages across the board.”

The labor minister said the government struck a deal with unions to ensure full-time workers earn no less than 14 monthly payments of €1,000 for the entire year of 2022. The raise will be retroactive and apply to January and February.

Members of the Spanish Confederation of Business Organizations (CEOE), Spain’s main business association, rejected the wage increase unanimously.

“This will increase labor costs and add to the pressures already on the companies’ margins like rising prices of raw materials, supply chain bottlenecks and will make for a less dynamic economy with fewer jobs,” said the organization.

However, employers will have to comply with the new regulation regardless, which is expected to be made law by Spain’s executive council later this month.

Meanwhile, Spain’s progressive coalition government says it is not finished raising the minimum wage. The aim is for it to rise to 60% of the average salary by the end of 2023.

“If all our employment data says anything, it is that there is no contradiction between the rate of job creation and the increase in the minimum wage,” said Prime Minister Pedro Sanchez in an interview with El Diario. “On the contrary, it shows us that it is a powerful mechanism for the pre-distribution of wealth.”

Spain has the seventh-highest minimum wage in the EU. The highest is in Luxemburg (€2,257 per month), followed by Ireland, the Netherlands, Belgium, Germany, and France.

The lowest minimum wage can be found in Bulgaria, where it sits at €332 per month.

Yet six members of the European Union – Denmark, Italy, the Greek Cypriot administration, Austria, Finland, and Sweden – have no minimum wages at all.