Similarly, the reasons behind the brick crisis and the coronavirus are entirely different, and so are the paths Spain takes to recover. When the earthquake began in offices, Hispanic employees at Goldman Sachs showed greater inequality—those at the bottom suffered more while some found relief. The downturn followed the economic cycle that kicked off after the Wuhan pandemic, resulting in lower wages for many workers.
Data from the observatory Caixabank Research confirms this shift. It updates in real time through clients’ payrolls to track how salaries and their distribution are evolving. By the end of 2023, wage inequality, measured as the gap between the highest-paid and lowest-paid workers, ended the year with negative momentum. Notably, the inequality gap fell by 1.3% last year. This suggests wages for the bottom segment remained below pre-Covid levels, a point highlighted by Josep Mestres, a senior economist at Caixabank Research, in an interview with El Periódico de Catalunya of Prensa Ibérica.
Month after month, Caixabank data align with other indicators pointing in the same direction. For instance, the National Institute of Statistics (INE) updates the Active Population Survey annually. It shows that wages for the bottom 20 percent, the lowest earners, have risen since 2019 at nearly three times the rate of the top 20 percent. In other words, the lowest earners have gained momentum without the top earners losing ground, according to Mestres.
These findings mark a stark contrast with the recovery pattern seen after the 2008 financial and real estate crisis. Two factors are singled out by the Caixabank economist as decisive: a later, stronger burst of economic growth following the earlier downturns, and targeted public support that cushioned job losses among lower-income workers.
Public aid designed to sustain workers during economic disruptions reduced the depth of employment destruction for those most exposed to precarious labor markets. By retaining employment, workers are more likely to see wage increases, rather than having to restart their careers entirely, according to Mestres.
On the other hand, the current expansion of the job market ends 2023 with about 1.4 million more members in the Social Security system, signaling broader coverage and greater benefits for low-wage workers compared with 2019. The real-time tracking of labor conditions by the banking sector and broader labor market signals supported a more decentralized pace of progress. Another difference from the prior crisis was the slower realization of growth among foreign-born residents in Spain, who took longer to notice changes in their household finances.
Intense rise in SMI
Beyond this diagnosis, additional voices join the conversation to explain the ongoing improvement in wage parity. The government and unions advance a triple account. First, the employment composition effect—the jobs created are of higher quality and pay than those generated earlier, aligning with job growth observed in Social Security statistics and earnings trends.
Second, labor reform plays a role. The prevalence of temporary contracts remains higher in the private sector, with implications noted by the Bank of Spain: permanent contracts translate into higher spending, benefiting the local economy. Third, the interprofessional minimum wage has risen substantially, with the government increasing it by more than 50 percent since 2019.