Why does Spain have such low wages?
Despite having the highest average salary in history, the average Spanish wage is almost 450 euros lower than the EU average and continues to have one of the highest rates of job insecurity in Europe.
Inflation has eaten into wage increases and reduced citizens’ purchasing power to an extent not seen for thirteen years. This economic mess is not unique to Spain, but it is exacerbated by Spain’s low wage levels, an endemic problem that has been dragging on for decades.
Although the latest unprecedented rise in the minimum wage has reduced the gap, both the average gross wage (1,126 euros) and the Spanish minimum wage (1,751 euros) are among the lowest in the European Union, 20.2% lower than its European partners.
Within the Western bloc, with average wages above 2,500 euros per month, Spain is at the bottom, followed by Portugal (1,106 euros) and Greece (1,034 euros). There are wide differences with countries such as France (2,446 euros), Belgium (2,830 euros), the Netherlands (2,883 euros) and Germany (3,303 euros). Spain only does well when compared with the less developed countries of Eastern Europe.
Minimum Wage EU
Average Salary EU
Low productivity and high unemployment
The precariousness of employment for a large part of the population in the face of the business world is an endemic historical evil in Spain. The insecurity created by the fear of unemployment makes workers accept low wages and working conditions that would be unthinkable in other developed countries.
When, after the sanitary crisis, the media spoke of “The Great Resignation“, referring to the fact that in many Western countries many employees were rethinking their priorities, giving up their usual jobs to get better ones, from here, with more than three million unemployed and salaries equivalent to a Western European China, we looked at it as if they were talking about another planet.
The high number of part-time and temporary full-time workers means that many employees do not receive proper training and do not maintain a professional career, which negatively affects productivity. This is exacerbated by the heavy weight of the service sector in the Spanish economy, which has little added value, low wages and is prone to outsourcing labour activity. The composition of our productive fabric has suffered a gradual deterioration in sectors that historically had better salaries.
Added to this is another trend that is prevalent in Catalonia and in Spain, but which is not observed in the developed European bloc: the enormous wage gap between younger and older employees. The low salaries received by the youngest employees, who will have to sustain the economy in the future, jeopardise the economic support of the country and a solidarity-based pension system.
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