Spain’s Solution to Low Wages: Unemployment Benefits for Earners Below €1,350

The Wage Crisis in Europe

The issue of inadequate salaries compared to the cost of living is a pressing concern in many European nations.
Each country has been exploring varied solutions and strategies to meet the needs of its workers.
However, not all measures are well received, and debates about their effectiveness are often divisive.
Among the various approaches, Spain’s solution to low wages stands out.

Spain’s Approach to Low Salaries

Spain’s public employment service is prepared to extend unemployment benefits to those working while earning less than €1,350 per month.
This initiative aims to provide necessary financial support to struggling workers while encouraging employment.
Specific eligibility criteria and restrictions are established, along with targeted checks to combat fraud.

When implemented, this measure could offer significant relief to many Spanish families.
It’s natural to compare this initiative with the proposals from the Italian government, which is currently discussing unemployment within its upcoming financial plan.

Details on the Unemployment Benefits in Spain

The Spanish government plans to allow workers earning below €1,350 to simultaneously receive unemployment benefits.
The Employment and Social Economy Minister, Yolanda Diaz, revealed that this change is made possible by a recent legislative intervention, the Royal Decree-Law No.
2/2024.

Individuals who have received unemployment benefits for a year and subsequently start working will be eligible for support, provided they earn less than €18,900 annually.
In this case, unemployments benefits will serve as an income supplement, representing 80% of the IPREM (Public Indicator of Income for Multiple Effects), the benchmark for social benefits in Spain.

This equates to €480 monthly for full-time workers.
For part-time employees, the amount will range between 50% and 60% of the indicator.
This is designed to promote job creation while supporting workers financially.

These benefits are set to last for six months from the start of the allowance, but, according to the law, they won’t be distributed before 2025.

The Situation in Italy

In Italy, the unemployment benefit (Naspi) is granted only to individuals who have lost their jobs involuntarily, with specific exceptions in place.
For instance, it is compatible with protected resignations during maternity leave.
However, if someone starts working while receiving Naspi, the benefit is suspended, with severe penalties for not reporting employment or working illegally.

Unlike Spain’s recent changes, opportunities to work while on Naspi are traditionally limited to specific instances with much lower income thresholds.
It seems unlikely that forthcoming financial policies will alter this framework, given the constrained resources available for the 2025 Budget Law and the priorities set by the Meloni government.

Proposed economic aids for family support might change, and a salary increase could arise from tax cuts for middle class workers and a flat tax on overtime, leading to better earnings.
However, there is currently no clarity on these matters.

Despite this, it appears the government remains focused on curbing fraud within the unemployment system, which, while addressing issues of misuse, continues to sideline considerations for actual employment increases.