A few days ago, the newspaper The world titled an article that became very viral as follows: “The biggest drop in the historic series brings the most common salary in Spain down to the minimum wage threshold”. What can we interpret after reading this title? Obviously, nothing good. The most logical reading is that wages are now lower in Spain; That is to say that people earn less than before (even less than ever, some might think after reading the “biggest drop in historical series”). But, while this is an intuitive reading, it couldn’t be more wrong. The reality is that all nominal wages have increased, and the fact that the most common wage is now equivalent to the minimum wage is progress, not backwards. I explain it.
This title, as well as all those which reproduce more or less the same message, are based on the recently published Salary Structure Survey of the National Institute of Statistics (INE) corresponding to the year 2022, which proposes numerous data and indicators on salaries. ; among them, the average salary, the median salary (the one which is right in the middle of all the values) and the modal or most frequent salary (the one which is repeated the most times). The first two saw an improvement between 2021 and 2022, generally interpreted as a general improvement in working class pay. But the third salary, the most common, decreased significantly in the same period, going from 18,502.54 euros per year to 14,586.44 euros. Of course, this is a very notable drop in a single year that has understandably alarmed many people, although a careful reading of what happened should allay those concerns.
In 2017, just before the minimum wage began to be significantly increased, the most common salary was 17,482 euros per year. At that time, many people earned less, as shown in the area to the left of the most common salary in the graph (taken from the INE).
But as we know, since then the minimum wage has increased thanks to the agreements between the PSOE and Unidas Podemos. The largest increase took place in 2019, followed by 2022. These measures increased by law the salaries of those who earned the least, in particular and gradually increasing the already indicated left part of the distribution graph, as can be seen see below.
In other words, those at the bottom of the scale gradually improved their pay, always reaching the new minimum wage. But in 2022 something happened that had not happened before: the significant increase in the minimum wage to 14,586 euros per year brought together so many workers at this level that they outnumbered people who received the salary level that existed until then. the most frequent (around 18,400 euros), making the minimum wage the most repeated of all.
Thus, the indicator that shows the most frequent salary suddenly rose from around 18,400 euros to 14,586.44 euros, precisely the legal minimum wage. Hence the title cited at the beginning of this article. But the main thing is to understand that it is not that those who previously earned more than 18,000 euros now earn around 14,586 euros, but that workers who previously earned less than these 14,586 euros now earn precisely this salary , and there are simply so many of them that they have become the most numerous. This is a salary improvement, not a setback. The improvement occurs mostly in the lowest salaries, but it also occurs in the rest of the levels, as can be seen below.
Of course, someone might think that it is not an achievement for the country that the most common wage is the minimum wage and not a higher wage, but that is another topic; Regardless, the fact that currently the most common salary is lower than before and equivalent to the minimum wage is good news because it shows an improvement compared to previous years. Someone could also point out that said general wage increase has been lower than inflation, so purchasing power has been lost, and they would be absolutely right, but that’s another question that doesn’t invalidate the fact that between 2021 and 2022 there has been This is an improvement in nominal wages and not a decline as one could deduce from the title that we have quarantined.
So be very careful with poorly written headlines and quick, intuitive interpretations: although it may seem bad that the most common salary is now lower, it is actually the statistical result of an increase in lower salaries, which is positive.
