This 2022 proved to be an ‘annus horribilis’ for many workers in Spain. It stands as the worst year for wages in the 21st century, according to data updated this week by the Department of Labor, which tracks collective agreements between employers and unions. The salaries negotiated through these pacts rose by 2.8% by year-end, well below the 8.4% average inflation recorded across the year. December’s CPI shows 5.8%, so real wages fell, but the decline remains one of the deepest since reliable statistics began.
By the close of 2022, there was net job creation of about 470,000 positions, yet the economic picture remained stubbornly uneven. The business landscape held up as best it could and saw a small rate of firm destruction, particularly among smaller companies with fewer than five employees. Against the sharpest inflation the country has faced since the 1980s, those costs were borne by households as the price crisis spread across major Western economies.
Spanish workers finished the year after a decade of stagnant wages, with price increases and earnings growing at roughly the same pace year over year. Household budgets were squeezed by rising everyday expenses like groceries and fuel, and the overall balance was disrupted. Not all sectors fared the same. Profits for Ibex 35 companies rose at a pace far faster than wages since the onset of the pandemic.
2022 introduced a few notable shifts. Pensioners and those protected by law tied to the CPI generally managed to preserve purchasing power, though there were exceptions. Civil servants saw wage growth around 3.5%, which still translated into a real-wage decline. The minimum interprofessional wage increased by about 3.6%, a change that mirrored the broader downward trend in real earnings for many workers.
Collective bargaining improved in its structure over the year. In the first half, many expired agreements were not renewed, leaving unions and employers to negotiate new salaries on a sectoral basis. Yet a direct agreement among the leading bodies, CEOs, the CCOO, and UGT, stalled over how wages should respond to CPI movements.
To prevent automatic payroll revisions at year-end, the CEOE opted to guard against an inflation-linked rise, arguing that wages should not automatically track inflation. This move helped restrain the 3.5% wage increase that had been discussed, ultimately resulting in an average rise of 2.8% in most agreements, as reported by the Department of Labor.
Growing inequality between sectors
Negotiated raises varied widely, with some sectors granting larger increases and others staying tighter. For instance, where hospitality in Barcelona offered around 4% without a clause for adjustments, metal industries in the same region could have climbed to about 7% with such a clause. Overall, wage growth remained uneven, with roughly 30% of workers receiving a bump above 3%.
Paradoxically, sectors that enjoyed the strongest short-term gains during recent months were often those delivering the least favorable conditions for workers in 2022. The banking and energy sectors, for example, posted modest wage gains around 1.2% to 1.9%, while margins expanded for many of the largest firms. A July report from the Bank of Spain warned that many big companies were widening profit margins even as the price crisis persisted, highlighting the tension between corporate profits and wage growth amid a challenging inflation environment.