Spain to raise minimum wage by 8% as elections loom

MADRID (Reuters) -Spain's leftist coalition government is set to approve an 8% rise to the national minimum wage in this election year, Socialist Prime Minister Pedro Sanchez told lawmakers on Tuesday.

The increase, the fifth under Sanchez's premiership, would represent an additional 93 euros ($100) per month, bringing the new minimum wage to 1,259 euros in 12 instalments per year.

"In 1999, a Spaniard needed to dedicate four annual salaries to buy an apartment. Today, he or she needs to spend more than twice as much, eight annual salaries," Sanchez said as he justified the measure in the upper house.

The Labour Ministry said in a statement the minimum wage had increased by 47% in the last five years.

The move, which comes after average inflation hit 8.4% in 2022, is part of a plan agreed under the coalition deal with the left-wing Unidas Podemos to boost the net minimum wage to 60% of the country's average monthly pay by the end of its four-year term.

"Thanks to the agreement with trade unions, we are making effective one of the major commitments of the legislature: to reach at least 60% of the average wage," Labour Minister Yolanda Diaz of the Unidas Podemos wrote on Twitter.

Earlier on Tuesday, the government met union representatives to inform them of the hike, but the main employers' associations did not attend the meeting and said they opposed the increase after advocating a hike of just 4%. They would still have to comply with the increase.

Unai Sordo, secretary general of Spain's largest union CCOO, said around 2.5 million people would benefit from the measure, especially women, young people, those with temporary contracts and workers in the service and agriculture sectors.

Spain has local elections in May and a general election at the end of 2023.

($1 = 0.9228 euros)

(Reporting by David Latona and Belen Carreno; Editing by Andrei Khalip and Barbara Lewis)