The 2021 figures show a notable rise in wages, with a 2.1% increase that marks the strongest annual gain since 2018 when wages climbed 5.6%. This uptick is based on the Labor Price Index (IPT) published this week by the National Institute of Statistics (INE). The IPT focuses on the cost employers incur for labor in available positions, while removing distortions caused by changes in the number of hours worked, contract types, worker characteristics, seniority, and career progression. In other words, it isolates pure wage movements from shifts in employment structure.
The 2.1% salary advance observed in 2021 contrasts with a 0.6% wage drop in 2020, the year the COVID-19 pandemic began to affect economies worldwide. The IPT data show that wage growth touched both genders, with women experiencing a 2.3% increase and men 1.9% in 2021. Temporary contracts rose by 3%, permanent contracts increased by 1.9%, and overall wages grew by 2.4% across all age groups, led by workers aged 25 to 34.
Economic activities driving the largest salary gains in 2021 relative to 2020 included other services at 4.4%, construction at 4%, public administration at 3.7%, water supply at 3.1%, and trade at 2.5%. These sectors collectively contributed to a broad-based improvement in earnings across the economy.
The accommodation sector posted a 1.4% salary increase, while energy supply was the only sector to experience a decline, with wages down 4.4% from the previous year. This divergence highlights how different industries faced varied demand and cost pressures during the post-pandemic period.
Looking at contract type, salaries for temporary workers rose by 3% in 2021, compared with a 1.9% rise for those on permanent contracts. In terms of working hours, full-time positions saw a 2.2% salary increase, while part-time roles reported a 1.6% gain, reflecting differing patterns of utilization and labor market flexibility.
When analyzing by occupation, the smallest wage gains occurred among factory and machine operators and assemblers, as well as food service workers and military occupations, each posting modest increases around 0.6% and 1.2%, respectively. By contrast, technicians and professionals led the gains at 3.1%, with managers and executives close behind at 2.9%.
Across age groups, every cohort saw higher wages in 2021. The strongest uplift appeared among individuals aged 25 to 34, with a 2.4% increase, followed by the 35 to 44 group at 2.3% and the 45 to 54 group at 2.2%. The youngest group under 25 experienced the smallest advance, around 1.1%, reflecting the gradual normalization of entry-level compensation as the labor market recovered.
Wage dynamics by nationality show a 2% increase for workers born in Spain, with foreign workers experiencing a higher level of wage growth at roughly 3.5%, underscoring different experience levels and possible sectoral composition among migrant labor.
Salaries increased in all communities
In 2021, every autonomous community reported salary gains, with Castilla-La Mancha leading the regional increases at 3.5%, followed by Extremadura at 3.1%. The Canary Islands and Aragon each posted gains around 2.6%, illustrating a wide distribution of wage improvements across regions.
The smallest regional increments were observed in Murcia at 0.5% and in La Rioja, Navarra, Galicia, Catalonia, and Asturias, all registering about 1.5% higher wages compared with 2020. These numbers reflect the uneven pace of recovery and the impact of local economic structures on wage progression.