A new year is approaching and many workers and businesses are addressing a key debate: wage increases. The government itself too, which is faced with the debate on the increase in the inter-professional minimum wage. When increasing the SMI, the government generally takes into account several factors, such as price developments, but also the overall increase in wages. Although it may seem surprising, this second point does not have a unequivocal answer, but rather we find different figures – sometimes even very different – depending on the statistics consulted.
This is what happened, for example, with the latest salary results published by the Labor Force Survey (EPA), which surprised with quite extraordinary data, however high they may be. INE statistics indicate that the average monthly salary increased by 7.3% last year, the largest increase in fifteen years. This figure is much higher than the increase proposed by other statistical sources for 2023, such as the Tax Agency (5.3%) or the signing of collective agreements (3.5%).
“Every stat is good for certain things, there’s always something it doesn’t cover, so we always need a cross-over between them. I think this is the solution,” economist Laura Hospido, a researcher at the Bank of Spain and CEMFI, who currently advises the Ministry of Economy, said this week.
With a large table containing up to nine different statistics with salary data, Laura Hospido explained some of the challenges of this variety of information sources. One of the most important is that a large part of the statistics do not provide data on the working hours linked to these salaries, a key element for the analysis of salaries, he indicated during a conference organized by the CSIC, the INE and the Fedea. .
Wages regain purchasing power
So, to answer the question “how much are wages increasing?” “, generally speaking, labor market specialists emphasize that workers are regaining purchasing power after the worst of the inflationary crisis (in 2021 and 2022).
“Salary increases generally correlate quite well with the previous year’s inflation, perhaps because of the way increases are negotiated by agreement. Based on this, a sharp increase in wages was expected in 2023, after 2022 saw the highest inflation in decades,” says Ángel Talavera, chief economist for Europe at Oxford Economics.
In May 2023, the main collective bargaining agreement was signed between employers and unions, with recommendations for state-level wage increases that accelerated the signing of collective agreements.
However, if we want to precisely quantify salary increases, the task becomes a little more complicated. “The problem is that there are many salary series giving different data,” Talavera acknowledges. The key here is to look at what exactly the statistic we are looking at measures and where it gets the information from.
For example, the Salary Structure Survey (EES) published by the INE is the most detailed in terms of information on remuneration (especially the quadrennial one), but it always arrives very late. The latest available results correspond to 2022. This places the average annual salary at 26,949 euros gross per worker in 2022, or 4% more than the previous year.
As of 2023, there is recent data from two statistics. That of the tax authorities, which places the average annual salary at 23,980 euros gross, up 5.3% compared to the previous year. And, as indicated, those of the Labor Force Survey (EPA), which records an average monthly salary of 2,273 euros gross, in twelve payments (27,276 euros per year), with an annual increase of 7.3% .
Regarding what happens in 2024, we can turn to the provisional statistics of increases agreed in collective agreements, published by the Ministry of Labor. This includes a salary increase of 3.1% in collective agreements with economic effects this year (3.5% for those in 2023).
The Quarterly Labor Cost Statistics (ETCL), published by the INE, also offers data for the current year, with a more company-centered perspective. This includes an increase in “salary cost” of 4% in the second quarter of 2024 compared to the same period of the previous year.
We’re not just talking about salary: jobs, hours
Faced with such a diversity of data, some may think that some – or all – statistics are false or provide incorrect information. However, as stated previously, in general each relies on different sources of information and offers us different insights.
For example, one thing is the salary increase agreed upon in a collective bargaining agreement, another is the salary increase that is ultimately applied to a specific employee on their payroll (let’s say they get a promotion or job). ‘individualized improvement), and another difference is the money a person ultimately earns from their work income, which is influenced not only by salary increases, but also by factors such as the number of hours or days worked or if he changes contract, to name just a few examples.
And we must also remember that, behind the average data for all workers, there are very different situations and that jobs are also evolving. In recent years, for example, the number of personnel in certain sectors with higher added value, such as scientific and technical professions, has increased significantly.
Thus, Alberto del Pozo, economist of the UGT economic office, considers that the extraordinary increase of 7% that the EPA receives on the monthly salary is due to “a sum of several things”. In the absence of more detailed analysis, he senses that there could be a certain “cork effect” of collective agreements in 2023, after the major wage pact, but also a possible “postponement” linked to the increase in Interprofessional minimum wage (SMI), which that year was 8%, among other factors.
In the economic cabinet of CCOO, Álvaro Gaertner recognizes that the increase reflected in the EPA provides information on other circumstances experienced in the labor market. In their case, they highlight the stabilization of many temporary contracts thanks to labor reform, with an improvement in the conditions of thousands of workers.
The detailed data from the 2022 Salary Structure Survey, analyzed by elDiario.es, go in this direction, which shows a much greater increase in the lowest salaries, those that reduce the temporality the most and increase the most their hours or days worked. .
Gaertner also points out that some companies and sectors may be implementing “efficiency wages,” with higher pay increases where it is harder to find workers and retain staff.
