Salaries in Spain are notoriously low and have remained so for many years. Why is it that financial progress would not translate into greater incomes for Spaniards and foreigners within the nation?
Based on the newest knowledge obtainable from Spain’s nationwide stats physique, INE, the typical annual wage in Spain is €26,948.87.
Nevertheless, there’s some nuance to those numbers. There is a large distinction between the typical, the ‘most frequent’ wage (the mode common) and the median wage.
The information exhibits that the median wage in Spain was €22,383.11, whereas the modal wage (essentially the most frequent, with 4.2 p.c of whole earners) was round €14,586.44, though salaries of €16,495.84 (4.2 p.c of the entire) and €18,494.32 (4.1 p.c) have been additionally widespread.
READ ALSO: Spaniards no higher off than 25 years in the past regardless of financial development
That’s to say, the headline ‘common wage’ figures aren’t actually consultant of how issues are on the bottom in Spain. In actuality, wages are low and have been for a few years.
This wage development is mirrored even on the higher finish of the job market and financial system. Managers and firm administrators in Spain with many years of expertise may earn €50 or €60,000 per 12 months, a wage that might be thought of an early-career and even graduate-level wage in international locations reminiscent of the USA.
In recent times, these pressures have been amplified by the price of dwelling disaster, particularly inflation on issues like lease and meals costs. However salaries in Spain are failing to match these will increase.
Put merely: Spanish salaries have been low for a very long time — why is that?
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Decrease price of dwelling
Some have argued that Spain’s decrease wages are a results of, or reflection, slightly, of the decrease price of dwelling.
It’s true that the price of dwelling in Spain is cheaper than in lots of different international locations. Nevertheless, this has modified, as famous above, notably within the post-pandemic interval, and as economist Ignacio De La Torre has famous, Spanish salaries are nonetheless low even with the price of dwelling taken under consideration.
In comparison with Spain, common annual salaries in 2023/4 have been 56 p.c greater in Germany, 43 p.c greater in France and eight p.c greater in Italy, based on OECD figures.
“It may very well be argued that salaries in Spain are decrease due to the decrease price of dwelling,” De La Torre argues. “This may be calculated by analysing buying energy parity (PPP), and we are able to see that the price of dwelling is 38 p.c greater in Germany, 23 p.c greater in France and 5 p.c greater in Italy.
“From this it may be deduced that the distinction in the price of dwelling is lower than the distinction in salaries,” he says, concluding: “Spanish salaries are low even when adjusted for the differential in the price of dwelling.”
For a lot of enterprise homeowners who’re conscious of how life in Spain is relatively cheaper, there’s little incentive to supply greater wages.
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Unemployment
Unemployment may additionally play a task right here. Spain has lengthy had one of many highest unemployment charges in Europe. The truth is, in recent times it has constantly had the very best amongst EU international locations. Eurostat knowledge exhibits that unemployment in Spain was 10.4 p.c in February 2025, in comparison with an EU common of 6.1 p.c.
In some components of Spain, such because the Andalucia and Extremadura areas, the speed is way greater than this, particularly amongst younger individuals.
The speculation, then, is {that a} scarcity of jobs and excessive unemployment makes individuals extra prone to settle for any job they will get and, subsequently, decrease pay.
It is one of many causes that steady, well-paid work is so wanted in Spain, whether or not it’s within the grocery store chain Mercadona or realising the so-called ‘Spanish dream’ of being a civil servant funcionario.
READ ALSO: Why achieve this many Spaniards wish to work for Mercadona grocery store?
Excessive immigration
Immigration may additionally hyperlink to this. Spain has welcomed report numbers of migrants in recent times, with the international inhabitants now accounting for nearly 14 p.c of the entire inhabitants, based on new knowledge from the Funcas suppose tank’s annual ‘Dato del año‘ report.
Wanting on the figures, the international inhabitants in Spain has gone from representing 11.6 p.c of the entire inhabitants in 2022 to 13.8 p.c as of late-2024.
The biggest migrant teams are typically from international locations reminiscent of Romania and Morocco or Latin American international locations like Colombia and Venezuela. These are sometimes poorer international locations the place, regardless of the very fact Spanish salaries are low on a European stage, for migrants arriving in Spain may very well be comparatively good.
Briefly, why would employers and enterprise homeowners rent Spaniards once they can preserve prices down and pay immigrants much less?
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Decline of union energy
The declining energy of commerce unions in Spain can be value contemplating.
In fact, the waning energy of organised labour is way from a uniquely Spanish phenomenon. The rise of the commerce unions in Spain reached its peak after the loss of life of Franco. In the course of the Suárez presidency membership reached 44.6 p.c, based on OECD knowledge.
Over one in three Spanish employees have been nonetheless union members in 1981, based on Sociological Analysis Crew (EDIS) knowledge.
These figures mirrored the affect of unions within the office, working for higher pay and dealing situations. one thing that has been waning over time. There are numerous causes for this.
Nevertheless, by 2023 solely 14 p.c of the working inhabitants in Spain was affiliated to a commerce union, that means the vast majority of employees in Spain have misplaced their means to simply cut price or go on strike, in essence pitting them individually towards the boss or firm.
It is no coincidence that the Basque Nation, the area with the very best common salaries, is often known as the ‘strike capital’ of Spain.
READ ALSO: Why the Basque Nation is the strike capital of Spain