The Valencian Community saw the sharpest rise in labor costs among its major economic sectors over the past year, with an increase of 4.11 percent. This uptick placed industry at the forefront of the regional cost trend, outpacing services and construction. The latest figures from the National Institute of Statistics, released this Thursday, have sparked diverging interpretations across different socioeconomic groups. Employers argue that higher labor costs threaten employment levels, while unions contend that wage gains are still too modest and workers are losing purchasing power in real terms.
The burden per worker per month reached 2,677 euros at year-end, a figure just below the national average increase of 4.2 percent. Within the Valencian Community, the sector with the highest per-employee cost stood at 3,025 euros, reflecting a 5 percent rise. Services showed a 3.8 percent increase, while costs associated with abandonment (likely a translation artifact referring to turnover or related metrics) reached 2,591 euros and construction rose by 3 percent to 2,729 euros.
Regional disparities in the data highlight Cantabria as the province with the largest increases at 8.44 percent, followed by Extremadura at 7.73 percent and the Balearic Islands at 6.99 percent. Other regions posted more modest changes, with Murcia at 0.26 percent, Galicia at 1.56 percent, and Asturias at 2.86 percent. In terms of absolute cost levels, the Basque Country led the country with 3,564 euros, Madrid with 3,429 euros, Navarra with 3,302 euros, and Catalonia with 3,214 euros. The lowest costs were recorded in the Canary Islands at 2,475 euros, Extremadura at 2,479 euros, Andalusia at 2,627 euros, and the Valencian Community itself at 2,677 euros, echoing the national pattern where more expensive regions cluster on the northern and central coastlines, while southern regions show relatively lower costs.
Salvador Navarro, president of the Valencian Community Business Confederation, explains that the uptick in labor costs compounds other cost factors such as production expenses, taxation, and social contributions. He argues this combination erodes job creation and job retention in a climate where profit margins for workers are already under pressure. Navarro adds that raising contributions would be an unnecessary barrier to competitiveness and economic growth, especially as companies strive to sustain employment while government revenue remains strong.
Yaissel Sánchez, the general secretary of the UGT for l’Alacantí-Les Marines, stresses that the increase in labor costs does not align with inflationary pressures seen in 2022. He notes that workers have seen a decline in purchasing power during that period, even as large corporations reported rising profits. Paco García, CC OO’s secretary for the same border region, shares this view, pointing to substantial corporate profits and the limited spillover benefits for workers. The overall sentiment across these unions is that the current trajectory risks weakening consumer demand and the broader social fabric if wage growth continues to lag behind productivity gains and price increases.