This year, 2022 has become an annus horribilis for family finances, with the shopping cart filling up as wages lag behind. In the second quarter, the National Institute of Statistics released its quarterly labor cost survey, showing that the salary per hour actually worked rose just 1.1 percent from the previous year, while the gross monthly salary averaged 2,153.9 euros across 12 payments. Against inflation in the same period, this figure was outpaced, rising by 10.2 percent year over year. Cite: INE data.
INE figures also reveal that inflation does not affect all sectors equally, and that effective wages in services—where most workers are employed—have stayed flat over the past year, with only a modest gain of 0.2 percent. Industry recorded a 3.2 percent increase, and construction enjoyed the strongest rise at 6.5 percent, though this still reflects a loss of purchasing power for many households. The data point to the investment that companies make in attracting staff and sustaining activity within the sector. Cite: INE data.
In the current post-pandemic phase, many firms prioritize hiring new personnel over raising the conditions for those already on the payroll. This dynamic helps explain why GDP outpaced wages and why companies spend more on total wage costs than on hourly wage increases. The annual cost to hire a worker rose by 4.3 percent, while the cost per hour worked increased by only 1.1 percent. Cite: INE data.
More people found jobs and there were more hours for part‑time workers, along with management offering extended hours. These patterns align with robust early-year performance, as social security numbers reached new highs despite a challenging global backdrop. Cite: INE data.
at the tail of Europe
This week, Eurostat updated its European labor cost database. The data show that wage growth paid by companies in Spain remains among the lowest in Europe, with only Greece, Finland, Denmark, and the Netherlands posting smaller increases. Eurostat notes that the average wage increase for Spain is about 42 percent below the 27-country average. Cite: Eurostat.
The lack of alignment between employers and union leadership contributes to slow salary progress. Collective bargaining agreements have not been renewed in many cases, leading to wage freezes for workers, while a minority of renewed contracts are settled well below current inflation. Recent Department of Labor data indicate that average wage increases are around 2.6 percent—four times below price growth. Cite: Department of Labor data.
High unemployment drives down wages
Since the pandemic began, almost 800,000 jobs disappeared rapidly, and the labor market has undergone a strong recovery with more people employed and more hours worked. Even with seasonal setbacks, Spain now shows a growing number of active workers. Yet, with a national record of job creation in 2022, many families still face an annus horribilis as wallets strain under rising prices. This week’s INE quarterly labor cost report confirms that actual hourly wages rose only 1.1 percent year over year, placing the average gross monthly salary at 2,153.9 euros. Inflation in the same period stood at 10.2 percent, underscoring the gap between wage growth and price increases. Cite: INE data.