Viral Claim of 89% Purchasing Power Drop Since 1975 Debunked

Viral Claim of 89% Purchasing Power Drop Since 1975 Debunked

A calculation spreading on social media argues that the purchasing power of the average Spanish salary has plummeted by 89% since 1975. The figure, derived by adjusting an estimated annual salary of €15,000 from that era against a cumulative inflation rate of 1,410%, suggests that wage would be worth €226,500 today, compared to the estimated €25,000 annual salary for 2025. This result has sparked debate: while some hail it as definitive proof of impoverishment, others highlight glaring errors in the peseta-to-euro conversion and the adjustment method itself.

The Calculation Fueling the Controversy

The starting point is a gross average salary of €15,000 in 1975, equivalent to approximately 90,000 pesetas. Applying the cumulative inflation that the INE (Spain's National Statistics Institute) and various analyses place between 1,294.8% and 1,474% up to 2024, plus an additional 2% for 2025, leads to the conclusion that one euro from 1975 is worth €15.10 today. Hence the comparison: €226,500 versus €25,000. The ratio, 0.11, implies retaining only 11% of the original purchasing power.

The first sustancia ilegal appears in the conversion. The exchange rate of 166.386 pesetas per euro existed only during a few months in 2001-2002, not in 1975. Applying it half a century earlier is an anachronism that invalidates the calculation's basis. As one participant summarizes: "€1 equals 166.386 pesetas only for a few months in 2001-2002. There was no exchange rate between the euro and the peseta for the trinc 23 years." Another adds that the mark appreciated 17% annually against the peseta, which would multiply the discrepancy.

The 1975 Salary: 22,000 or 90,000 Pesetas?

The initial figure is also questioned. Against the 90,000 annual pesetas (7,500 monthly) implied by the calculation, several participants cite very different data. One states that "the average salary in 1975 was 22,000 pesetas, €132" annually, resulting in 1,833 pesetas per month. Another raises it to 264,000 annual pesetas in 1974. The range is enormous, and no exact official source supports these estimates.

With such shaky foundations, the 89% claim collapses. A more prudent analysis, starting from 264,000 annual pesetas in 1974 and comparing it with the 2024 average salary (€27,972), places the real loss around 15-20%. It remains a notable deterioration, but far from apocalyptic. As one participant ironically notes: "A nominal peseta from 1975 likely buys nine times less today. But it is obvious that people did not live nine times better in real terms back then, because a bus driver in 1975 would have lived in a penthouse with service on Velázquez Street."

Housing: The Factor Ignored by CPI

Beyond the arithmetic error, the debate shifts to an area where data truly hurts: housing. The CPI (Consumer Price Index) does not include owner-occupied housing prices, only imputed rents, distorting the perception of the cost of living. "The CPI is a complete scam," argues one participant, criticizing the exclusion of "important things like housing, energy, and daily items that keep rising."

The generational comparison is relentless. Fifty years ago, a worker without higher education could buy a new-build apartment and pay it off in a few years, support a large family on a single income, and afford quality fresh produce. Today, a couple with two degrees barely accesses a cramped mortgage debt spanning decades. "An acquaintance had a BMW Series 3 back then, and we saw him almost like Amancio Ortega. Now any neighborhood 'Cani' [slang for flashy local] has a BMW Series 3," illustrates another.

Labor Market: Fewer Hours, Lower Pay

The analysis expands to employment. It is noted that Spanish productivity has fallen by more than 7% since 2000 and total hours worked continue to decline. The result is a distribution of misery: over seven million workers do not reach the annual SMI (Minimum Interprofessional Wage) because their working days are involuntary part-time. The effective average salary hovers around €23,000, compared to the €27,972 average for full-time work.

The prevailing conclusion is that impoverishment exists, but not on the scale suggested by the 89% headline. The spectacular figure stems from a flawed calculation; the reality, grayer, points to a loss of purchasing power between 15% and 20% in real terms, exacerbated by housing costs and labor precariousness. Is this deterioration enough to explain social discontent, or do we need exaggeration to feel the pain?