The urgency with which the minimum wage (SMI) has been increased in Spain (a 46% rise just between 2018 and 2023, triple the increase of the preceding decade) clashes with companies’ real capacity to absorb it. And this has an impact: if the nominal SMI was equivalent to 60% of the modal (most frequent) salary in 2018, it reached 97% in 2023.
Thus, in Spain, the interprofessional minimum wage is on its way to becoming the most frequent one. In fact, in real terms, meaning discounting inflation, the gap between the two benchmarks has been reduced to a minimum of 2.97%, compared to 39.3% in 2018. This evolution has a clear interpretation, as explained by the newspaper El Economista: the SMI is so disconnected from the economy and the labor market, and it has not had any positive ‘pull effect’ on the payrolls of workers earning a higher salary. In fact, they are losing purchasing power relative to inflation.
Research developed by Fernando Pinto, a professor of Applied Economics at Rey Juan Carlos University, shows how the Spanish wage structure has become concentrated at the lowest levels. This is a phenomenon that has been dragging on since the financial crisis. In 2009, the modal salary (the most common) reached an annual nominal figure of €15,491.59, compared to the SMI’s €8,736. The gap between the two was €6,755.59, or 77%.
For 2018, the modal salary was 16,977.6 euros per year and the Minimum Interprofessional Wage (SMI) was 10,302.6, which resulted in a difference of 6,675 euros, or 64%. But from then on, the minimum wage began its most intense upward ‘rally,’ with the goal of reaching 60% of the average salary, as established by the European Social Charter. This led to the modal salary falling by 8.6% to 15,575 euros in 2023 (the latest data available in the Wage Structure Survey) and the SMI rising to 15,120, an increase of 46%, which reduced the difference to 455 euros, barely 3%. Since Pinto’s data is based on the INE’s Annual Wage Survey, which only extends to 2023, it does not include the SMI increases of 2024 (4.4%) and 2025 (5.5%).
The drop in the most frequent salary in Spain occurred in 2022 after a decade of relative stability and saw a slight recovery in 2023. This behavior can be explained as a consequence of the pandemic: the reactivation of tourism was particularly intense that year, bringing with it strong job creation. The sector took advantage of the arrival of immigrant labor to raise the worker base, but without being forced to raise wages at a similar rate. The wage data in current terms shows that salaries improved, but only in the lower bracket, which is influenced by the SMI. The figures demonstrate that this improvement has not extended to higher salaries; it has not contributed to raising the general wage level.
