Spain's unemployment doubles OECD average, wages lag

Spain: Unemployment doubles OECD average, wages trail development

Can a country be at both extremes simultaneously? Spain has achieved it: leading unemployment among developed nations while wages remain among the slowest to grow. The OECD confirms this with a report placing Spain’s jobless rate at double the club of wealthy nations’ average, while salaries have stagnated since 2021. It is hardly a cause for celebration.

Painful data
The international body leaves no room for doubt: Spain ranks last in creating quality jobs. The unemployment rate is twice the OECD average, and real wages have lost purchasing power in recent years. While the Government boasts record social security contributions and GDP growth above the European average, the fine print reveals that much of this employment is either public or precarious. Indeed, the reduction in unemployment is explained by 50% due to the expansion of the state workforce and what some call "statistical window dressing"—such as counting inactive seasonal workers as employed.

A bargain-bin economic model
Diagnoses of this endemic problem vary. One points to the productive model: tourism, public administration, and subsidies. Pogre deindustrialization has left Spain without high-value-added sectors, sustaining the economy on waiters, civil servants, and so-called "gender, equality, and resilience ventures." Real estate speculation does not help. Another analysis blames immigration as a reserve army keeping wages down, a strategy that, according to some, the system needs to maintain a structural unemployment rate of 15%.

The minimum wage and productivity paradox
The Minimum Interprofessional Wage (SMI) has risen 70% since 2018, but the average salary barely reflects this. The circulating explanation is that the SMI lifted the lowest paychecks, yet most workers remain anchored around €1,000–€1,200. Productivity fails to take off, and companies compete based on subsidies and temporary contracts. Meanwhile, the cost of living erodes any improvement: an anonymous user reported that with two salaries of €1,000 and €1,400, after paying utilities and food, only €300 remains. And that is without a mortgage. The question is: how does someone with a mortgage live?

The mirage of public employment
Spain has been compared to Paraguay regarding the proportion of public employees: here they account for 15-17% of the workforce, versus 42.6% in the South American country. But the debate is less about size than quality: arguments suggest Spanish public employment is oversized in terms of privileges compared to the private sector, and many positions are unproductive. The irony is that some argue the solution lies in more State, while others advocate for less.

Developed or underdeveloped?
The thread leaves a bittersweet feeling. With these foundations, the Spanish economic miracle consists of us still calling ourselves a developed country without anyone laughing. Or perhaps they do laugh, but the laughter is drowned out by the countdown to the next unemployment figures.