According to the National Statistics Institute, the most normal average annual gross salary is around 16.500 euros. So once this has been paid 14 times a year and taxes and Social Security contributions have been deducted, this ends up as a little over 800 euros net per month. This sort of income will never drive consumption or housing sales and is not adequate for a European economy like Spain’s.
Reforms in Spain’s education system are key to guaranteeing future economic growth. But having a better educated population would also help to fight against rising inequality and poverty.
Companies have to make an effort to generate quality jobs so the recovery in confidence and consumption ends up being consolidated, says Mutua Madrileña chairman Ignacio Garralda.
Everyone seems to agree that salaries need to be increased in order to activate and maintain economic growth. That said, the differences between trade unions and businessmen is abysmal. And even though Spain’s economy may be growing at 3.1% in 2016, the country’s average wage has barely risen by 232 euros over the last 15 years.
The figures from the Q2’16 Labour Costs Survey for Spain confirmed that salaries are stagnating. Corporate profit margins in the Spanish economy has been dependent on wage contention, but Afi’s analysts remember that they don’t just depend on wage developments. The trend in productivity and prices is also important.
According to forecasts from The Organisation for Economic Co-operation and Development (OECD), Spain’s labour market will be amongst the top performers in the “Club of the rich countries,” registering the biggest advance in terms of employment in 2016 and overcoming the negative trend seen during the crisis. The international institution warns that a new recession could take Spain by surprise without having recovered all the jobs lost in the crisis.
BARCLAYS | 2015 was a surprisingly strong year for the Spanish labour market. Social security affiliations increased by 533k while the number of unemployed fell by 354k, according to figures released by the Ministry of Employment. December delivered another sizeable drop of 55.8k in registered unemployment and an increase of 85.3k in social security affiliations relative to November.
BARCLAYS | Spain has undergone considerable structural changes over the past four years. Stronger banks, more competitive firms and a labour market in recovery mode all support a brighter outlook.Ahead of the 20 December general election, we review the near- and medium-term growth and evaluate progress in the labour market, the private- and public-sector deleveraging process and the country’s international competitiveness.
Miguel Navascués | Junk labour contracts in Spain were created by the former Socialist Prime Minister Felipe González in 1984. At that time, González fought against the trade unions to introduce the temporary work contract. This proved to be of no use, as unemployment had increased to about 23% by the end of his term in office in 1993.