Spain, one of the advanced economies where real wages are falling the most
In the last five years, purchasing power in the State has fallen by 2%, according to the OECD
BarcelonaSpain is one of the advanced economies where real wages have fallen the most in the last five years. Specifically, inflation-adjusted purchasing power has decreased by 2% in this time and, as pointed out by the Organisation for Economic Co-operation and Development (OECD), it is not expected to rebound in 2026 or in 2027. However, in year-on-year terms, real wages grew by 2% in Spanish territory during the first quarter of this year.
The fall in the purchasing power of Spaniards over the last five years contrasts with the trend in the rest of the member countries, which have experienced an average increase of 4.9%. Despite this, if the median is observed – which better reflects the typical country without the influence of extreme values – the increase has been much more moderate: it has stood at around 1.2%. In the euro area, real wages fell by an average of 1.8% in these five years, while in the United States they decreased by 1.4%. Regarding the comparison with last year, Spanish real wages also grew less than the OECD average, which increased by 2.2%.
This stagnation of wages, as indicated by the authors of the report, occurs despite the Spanish government's initiatives to increase the minimum wage year after year, which has protected low-income workers. Thus, it is pointed out that, in practice, there has been "an even greater stagnation in the real wages of a large part of the workforce".
Unemployment and temporary work
Nowadays, Spain continues to be the OECD country with the highest unemployment rate, at 10.3% in May. Thus, despite employment in the State having grown uninterruptedly in recent times, the rate still stands well above the OECD average, which is 4.9%. According to the authors of the report, regional disparities in employment rates in Spain are "significantly greater" than in most of the organization's economies, and they indicate that unemployment also presents large differences, between the provincial minimum in Gipuzkoa (6.4%) and the maximum in Melilla (28.3%).
Furthermore, in the analysis of Spain, the OECD notes the effects of the 2021 labor reform to reduce temporality. As pointed out, Spanish legislation is one of the strictest and has managed to "reduce" the persistent dualism of the labor market. Specifically, the proportion of workers with temporary contracts fell from 24.8% in the first quarter of 2022 (when the reform came into force) to 14.8% in the first quarter of 2026. This figure, however, remains higher than in most OECD countries. The authors of the report also point out that part of this adjustment has actually been achieved through permanent discontinuous contracts, which, although formally classified as permanent, can involve periods of inactivity, thus not offering the same guarantees of income stability.
