Real average salary in Spain has barely increased in the past 30 years

Spanish people haven't seen real improvements in their incomes over the past three decades. According to OECD data, between 1994 and 2024, the real average salary in Spain has only increased by 2.76%. This shows that there have literally been three lost decades in terms of purchasing power.

This wage stagnation is worsening in a more burdensome fiscal context. Data from Funcas show that households' real net income is below pre-2008 crisis levels, while the tax burden, measured by the tax index, has increased from 100 in 2008 to 114.4 in 2024. In addition, the average personal income tax (IRPF) rose from 12.7% in 2019 to 14.4% in 2024, and households have borne an extra cost of €438 for VAT between 2021 and 2024.

Jon González, a prominent economic analyst, shared a definitive figure. Although the average gross salary has recovered part of its purchasing power since 2018, the average net salary is still 2.9% lower. This is because the personal income tax brackets aren't adjusted with the CPI, unlike pensions:

Spain's economic ill: productivity

Beyond the tax pressure, the underlying problem is structural. Organizations such as Moody’s and the OECD agree that insufficient productivity growth and dependence on low value-added jobs are causing Spain not to converge with Europe's economies. The OECD warns that since the mid-90s, productivity has grown very little (0.5% per year compared to the OECD's 1.2%), seriously eroding real wages.

In comparison, in other OECD countries, real wages have made greater progress. However, in Spain, wages have remained practically frozen. The consequence is that GDP per capita has stayed at levels equivalent to 1999. In this sense, massive immigration not only doesn't help stabilize GDP per capita, but it dilutes it even further.

Consequences

This scenario has real and concrete consequences. To begin with, it makes saving, starting families, and buying homes more difficult, and it worsens the differences between generations and social classes. The latter represents the main source of current inequality in Spain: age.

Moreover, in addition to all this, it should be noted that the State, as seen with the fiscal data, not only doesn't reduce inequality, but increases it. It's a system that takes resources and capital from the poorest to give them to the richest. This way, it remains to be seen how, in the long term, all the social groups that haven't been able to accumulate capital for some time will fare.