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The increase to €900 euros ($1,440) from €736 euros a month came into effect at the start of the year and directly affects about 8 per cent of Spain's workforce, or 1.2 million employees.

Spain's central bank estimates the wage jump could destroy around 125,000 jobs this year. But it acknowledges it can't know for sure given the "uncertainty associated with a national minimum wage increase on an unprecedented scale in Spain".

Budget watchdog AIReF has a more modest estimate of 40,000 jobs this year, while Spanish bank BBVA says more than 160,000 positions could be lost in the medium term.

Those forecasts are particularly jarring in Spain, where unemployment is the second-highest in the euro zone. But Raymond Torres, an economist at Funcas think tank in Madrid, says recent evidence shows higher salaries fuel greater spending that sparks more hiring, offsetting most of the job loss.