Industry found that the Valencian Community bore the heaviest impact from a 4.11% rise in labor costs over the past year, more pronounced than in services and construction, according to new figures released by the National Institute of Statistics (INE) this week. The data sparked divergent interpretations among socioeconomic groups, with employers arguing that higher labor costs threaten employment while unions counter that wage growth still falls short of protecting workers’ purchasing power. In plain terms, the picture is mixed: costs are rising, but the impact feels different depending on where you stand in the labor market.
Cost per worker per month for companies reached €2,677 by year end, a figure just under the national average increase of 4.2%. The sector leading the uptick was industry, reporting an average wage equivalent to €3,025 per worker and a 5% gain, followed by services at a 3.8% rise. Abandonment costs stood at €2,591, with construction showing a 3% increase to €2,729. These numbers underscore how varied the cost landscape is across sectors, and they reflect broader economic pressures as firms adjust compensation in response to inflation and tax changes.
Regional patterns showed the largest percentage increases in Cantabria, at 8.44%, then Extremadura at 7.73%, and the Balearic Islands at 6.99%. Murcia posted a modest 0.26% rise, followed by Galicia at 1.56% and Asturias at 2.86%. When looking at absolute cost levels, the Basque Country led at €3,564, Madrid at €3,429, Navarra at €3,302, and Catalonia at €3,214. The Canary Islands, Extremadura, Andalusia, and the Valencian Community itself reported the lower ends of the spectrum, with Valencia at €2,677 per worker per month, the figure noted earlier. Analysts point out that these disparities reflect regional economic structures, productivity gaps, and the varying mix of industries across autonomous communities.
Salvador Navarro, president of the Valencian Community Business Confederation (CEV), stresses that the rise in labor costs compounds existing expenses tied to production processes, taxation, and social contributions. He argues that this combination can undermine job creation and retention in a climate where profit margins on labor are already narrowing. From his perspective, higher contributions act as a hurdle to competitiveness and future growth, especially as companies strive to sustain employment levels while public revenue remains robust.
Yaissel Sánchez, general secretary of the UGT in l’Alacantí-Les Marines, notes that the uptick in labor costs does not appear to be inflationary across 2022. He points out that workers have suffered losing purchasing power, even as larger firms with substantial market power have continued to report rising profits. Paco García, CC OO’s secretary in the same border region, shares a similar view, highlighting how elevated trading profits do not translate into better worker outcomes and describing the impact as largely disappointing for employees who see earnings not matching rising living costs. These voices collectively reflect a broader concern: the balance between business profitability and real wages for everyday workers remains fragile, and the distribution of gains across the economy continues to be a point of contention among unions, employers, and policymakers. [Citation: INE data and regional statements; analyses by industry associations and trade unions.]