The Purchasing Power Of The Average Spanish Wage Is 6.9% Lower Than In 2009, When It Hit Record High

Spain's recovery

After the fall in wages in 2020 as a result of the ERTEs, the average Spanish wage has had a year-on-year increase of 6.4%, the highest growth since 1993, according to the Adecco Monitor. Thus, it marks a new historical maximum, with 1,749 euros per month. However, the magnitude of the increase is exaggerated by the fact that the average wage in the second quarter of 2020 was the lowest in the last 14 years as a result of the ERTEs. This rise is higher than that of GDP in 2021 (+5%) and in the fourth quarter (+5.2%).

Paradoxically, although the economic situation is still not ideal, in 14 autonomous regions the current average salary is the highest recorded in the statistics. The exceptions are the Canary Islands, the Balearic Islands and Cantabria. The Community of Madrid continues to be the region with the highest remuneration (2,071 euros per month; +5.3% year-on-year), escorted, once again, by the Basque Country, with an average salary of 2,047 euros per month (+4.9%). They are followed by Navarre, which, after an increase of 2.9%, shows an average salary of 1,887 euros/month.

When we discount inflation from the evolution of the average wage, we obtain the variation of its purchasing power. Considering the accumulated variations over the last eight quarters (the period considered by the Adecco Monitor to analyze the variations in the purchasing power of wages), it can be seen that the average wage for Spain as a whole is currently still gaining 0.5% in purchasing power. A year ago, on the other hand, it lost 1.3%.

However, the recovery of purchasing power in the last three quarters is not enough to change the fact that, from 2010 until now, only 30% of the quarters have registered improvements. In fact, the highest purchasing power in the historical series continues to be that of 2009, when it was 6.9% higher than today.

Translated into monetary values, the gain of 0.5% of the purchasing power of the national average wage is equivalent to the average wage earner having, at the end of a year, 103 euros more in his pocket than he had two years ago (remember that the Monitor takes into consideration the last eight quarters to make an average).

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.