The latest numbers from the Department of Labor, updated this week, show limited gains for workers as inflation remains stubborn. By April, wage settlements reached via collective bargaining in Spain rose only marginally from the prior month, averaging about 2.4 percent—well below the 8.4 percent rise in the consumer price index (CPI) for the same period. This gap corresponds with remarks from the extraordinary steering committee of CEOE, where leaders will decide wage increases by sector and issue sector-specific instructions. The overall recommendation for this cycle sits at 3.5 percent.
The surge in inflation is eroding households’ purchasing power. Salary data tied to collective bargaining since April 2021 reveal smaller increases than those tracked by the CPI. In effect, the new one-year working conditions agreement signed by employers’ associations and unions implies a loss of purchasing power for the average worker. In fact, only two in ten workers covered by a deal this year saw raises that topped core inflation, which excludes the direct impact of energy costs from the CPI.
Negotiations this year failed to produce a wage framework that would steer collective bargaining for the next three years. Even within the current year, talks concluded without a shared reference point, making the absence of a common framework obvious. Wage updates remain far below the pre-pandemic pace. Roughly 5.3 million employees are covered by a current collective agreement, down from over 11 million in 2019. Data from CCOO shows that a third of workers active in Catalonia are awaiting renewal of their collective agreements and may face one or two years with stagnant wages.
CEOE recommends 3.5 percent
With no general framework in place, CEOE convened an extraordinary board meeting to approve a package of recommendations for how wages should evolve across companies. Local media reported that CEOE will share these guidelines with its partners in the near future. The idea is that regions or sectors could grant industries the flexibility to set their own increases. The specific rise proposals would depend on the margins each sector enjoys and the balance of power with the unions.
As a broad, non-binding framework, the CEOE proposal calls for a 3.5 percent increase for this year, aligning with the latest plan put forward by Antonio Garamendi’s team to the unions. It seems unlikely that a formal agreement with CCOO and UGT will emerge, since power plants highlighted the need to generalize wage reviews to guard against unpredictable CPI movements. Given the potentially higher labor costs this could lead to, many employers remain opposed. The stakes are clear: without a unified approach, wage growth stays subdued even as inflation continues to pressure households and the economy step by step. This dynamic is shaping how firms plan investments, hiring, and broader wage policies across regions, with regional autonomy playing a central role in the pace of wage evolution. The data and imagery are drawn from internal industry summaries and union-employer reports, offered here to provide an up-to-date snapshot of ongoing negotiations and their possible impact on purchasing power, job security, and market competitiveness. Attributions come from the involved organizations and can be consulted in published summaries for those seeking deeper insight. The overall trend remains cautious, with wage settlements likely to echo inflation while staying constrained in the absence of a binding national agreement that could set a clear instruction for all sectors.