Economics
Spain Takes an Economic Gamble on an Unprecedented Wage Hike
- Government has pushed through a 22% increase in minimum wage
- With pace of expansion slowing, impact of move is uncertain
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Spain is embarking on a major economic experiment: A 22 percent jump in the minimum wage that’s ignited a high-stakes debate about how it will impact the economy.
The Socialist government says the increase will bolster spending and hiring, giving legs to Spain’s expansion. But opposition lawmakers and wary business executives say any additional pep to the economy won’t be enough to offset the thousands of jobs they expect to be destroyed because companies can’t afford the jump in costs.