It happened again. Alicante workers face a third year with reduced purchasing power. The 2023 agreement raised wages by 3.22%, compared with an inflation figure of 3.55% that year. The gap has narrowed versus last year, yet unions warn that tougher times may lie ahead. They will press for wage alignment with the Consumer Price Index in ongoing negotiations with employers, while business groups call for moderation. Remember, the minimum wage has risen by more than 30% since 2018.
To pinpoint the last year when purchasing power did not dip, one must go back to 2020. That year saw a 1.67% nominal wage improvement alongside a mildly negative CPI. In practice, though, the COVID-19 ERTE measures diminished the real effect on many workers’ pockets, masking the underlying trend on paper.
From an inflation standpoint, the trend accelerated the following year. The year closed with an average CPI around 3.6%, while negotiated salaries rose by only 1.32%. The situation worsened in 2022, when inflation reached 8.7% due to the war in Ukraine, which pushed up fuel and electricity costs. Wages rose, but not fast enough, and the impact persisted. This divergence left Alicante workers with a total loss of purchasing power estimated at nearly 1,300 euros over two years.
In 2023, the pattern continued in a more moderate form. The difference between state-level agreements and the CPI stood at just 0.3 percentage points. With the average income per employee at about 19,112 euros, the purchasing power loss for that year was roughly 57 euros, a smaller amount than in earlier years but still contributing to the long-term squeeze. The 3.22% salary increase was uneven: roughly 2.87% in company-level contracts and 3.24% in higher-scope contracts, resulting in a non-uniform overall gain.
The provincial picture showed a greater erosion of purchasing power than the national average. The typical increase in agreements was 3.48%, yet this still lagged behind the Valencian Community’s overall inflation estimate of 2.89% in salary changes.
The erosion extended beyond the province as unions note a broader pattern: purchasing power diminished more quickly than in other parts of the country. Yet representatives continue to push for gains next year, aiming to restore and advance purchasing power rather than merely halt its decline. Yolanda Díaz Serra, the general secretary of UGT in l’Alacantí and the Navy, emphasizes a commitment to seek increases that exceed the offer of 4% from the CEOE. Paco García, president of CC OO in l’Alacantí-Les Marines, echoes the sentiment and stresses the urgency of improving wages in a climate marked by low wages, a sizeable informal economy, and job insecurity. He asserts that it is unacceptable to endure this trajectory.
Salvador Navarro, president of the Valencian Community Business Confederation (CEV), notes the notable rise in the minimum wage and argues that negotiated increases should align with the financial reality of businesses. He highlights the reliance on SMEs that cannot absorb higher labor costs and warns that public tender processes do not reflect rising prices adequately.
Criticism has mounted over the push for unemployment benefit reform. CC OO and UGT have criticized Podemos, which recently opposed the central government’s reform. The reform would extend benefits to about 36,000 Alicante residents, according to the latest figures. The plan from Labor Minister Yolanda Díaz includes increasing subsidies for new beneficiaries from 480 to 570 euros in the first six months, broadening eligibility to younger workers, those without family responsibilities, and some temporary agricultural workers. It would also make 180 days of employment contributions eligible for benefits and remove a one-month waiting period before the support can be claimed.
UGT’s l’Alacantí and Yolanda Díaz Serra argue that Podemos should not block the reform, which they say would advance rights and then address cuts. They note it targets unemployed people over 52 years old. Paco García of CC OO likewise regrets what he calls the stubborn stance of all parties that voted against the reform, arguing that the needs of society should have guided the dialogue and proposed alternatives. Regardless of these disagreements, both unions believe the situation can be redirected and the reform could still be approved.