CEOE: The SMI increase will have "a dramatic impact" on agriculture and domestic workers

The president of **CEOE** Tenerife, Pedro Alfonso, warned this Thursday that the increase in the interprofessional minimum wage (SMI) will have a "dramatic impact" on sectors such as **agriculture** or **domestic workers**. On Wednesday, the Ministry of Labor proposed to social partners a **3.1%** increase in the interprofessional minimum wage (SMI) in 2026, keeping this remuneration benchmark tax-exempt, which would raise the SMI from 1,184 to 1,221 euros gross per month in fourteen payments (37 euros more). In a statement, Alfonso also reiterated that the increase in labor costs **could lead to employment adjustments, especially among small and medium-sized enterprises.** Alfonso criticized that the SMI is being debated "at the whim of political opportunity" and considered that this approach is not "the best basis for working through social dialogue." In his opinion, employers demand a grand **productivity** pact that addresses issues such as "unjustified **absenteeism**" and avoids a policy of "continuous **overcosts**" for companies. The president of the Tenerife employers' association pointed out that the SMI increase not only affects **salaries** but also social **contributions**, and warned that future collective agreements will have to be negotiated with an already increased salary base. "The burden of an almost unmanageable situation is being placed on the shoulders of companies, and especially SMEs," he stated. He also questioned whether to apply taxation to the salary increase, understanding that this decision could lead to a new increase in the SMI and generate a cumulative effect on business costs, and insisted that SMEs lack the capacity to absorb systematic increases without affecting their **profitability**. In relation to **collective agreements**, Pedro Alfonso complained that the reduction of the salary range between categories will force an update of the higher levels, which will generally increase labor costs. As an **alternative**, he defended other ways to "improve families' disposable income," such as the **reduction of indirect taxes**, the decrease in **IGIC** in the Canary Islands, the deflation of personal income tax (IRPF) at the state level, and an "efficient and rapid" housing policy for the lowest incomes. Finally, he stressed that in the Canary Islands the impact is greater due to the weight of sectors such as **hospitality, tourism, commerce, and construction**, and questioned whether the current debate should focus on raising the SMI or on finding solutions to generate employment for all those who demand it.