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Despite economic growth, Spain’s younger workers see their salaries fall

Source: El Pais - Thu 29th Jun 2017
Despite economic growth, Spain’s younger workers see their salaries fall

Spain’s GDP grew by 3.2% in 2015, but the good news impacted in very different ways on the Spanish workforce, largely depending on age and sector. Salaries among the under-40s fell, with slight increases for those aged 40 and over, and an average 2.5% rise for people aged from 60 to 64, according to data published on Wednesday by the National Statistics Institute (INE). In short, the figures show that salaries are directly related to age and time served in a position.

The INE’s 2015 Salary Structure Survey is put together using information from the Tax Office and the Social Security department, and provides a picture of Spaniards’ pay before the taxmen get their share. The conclusion is clear: the Spanish labor market is split between young people with fewer years in the workplace, and older people, with more experience. For the first group, 2015 saw overall salary reductions.

Specifically, under-24s earned on average €11,228 gross, a 5.1% drop on the previous year. The 25- to 29-year-old range earned €16,064, a 1.6% fall on 2014, while the 30- to 34-year-old group earned €19,597, 3% less than the year before. Finally, those aged between 35 to 39 were paid €22,397, a 2.3% drop on 2014.

In part, these figures reflect that people entering the labor market in these age ranges were paid less than those they were replacing.

People aged over 39 maintained their salaries and in some cases were given pay rises. In the 45- to 49- age group, there was a 0.1% decline, but there was an overall 0.4% increase for the remainder of this cohort.

Pay for workers aged 60 to 69 rose by 2.6%. “There is a positive relationship between the age of workers and salary levels that reflects the way that older workers were, in general, those with the most experience in their position,” says the INE.

“In 2015, there is still a negative salary tendency, and these results are in line with a study we carried out for the Organisation for Economic Cooperation and Development which concluded that in Spain salaries depend on time served. People who move around lose their salary by having been out of work and starting again. That is where most of the reduction comes from,” explains José Ignacio García Pérez of the Pablo de Olavide University. The trend is more marked among young people, many of whom are on short-term contracts.

Salary increases among older people meant that in 2015, the average gross salary rose by 1.1% to €23,106, although that figure is somewhat skewed by the reimplementation of an extra month’s pay for public sector workers. In 2015, the overall average wage rose for the second year running, and was at its highest rate since 2010. But as the INE points out, the most common average salary in Spain for 2015 was €16,498, barely €8 more than the previous year, which divided into 12 monthly payments comes out at €1,374 gross.

The survey highlights the factors that decide salaries: those with minimum training, who are young, have no experience in a post, are female, with part-time or temporary contracts, are foreign, work in the private sector and particularly in the hospitality sector or administration, earn the least. Older Spanish men with time served in a post in the public sector, in the energy or banking sectors and on a full-time, permanent contract earn the most.

In 2015, the average pre-tax salary for a full-time worker was €27,039, compared to €10,065 for part-time employees. Workers on permanent contracts earned an average €24,561, while that figure was €16,422 for people on temporary contracts.

The average female salary was just 77.1% of that of male earnings. “The difference between men and women is reduced by taking into account variables such as occupation, length of working day or contract,” notes the INE.

In 2015, public sector workers earned on average €28,559, compared to the average for the rest of the workforce of €23,106. This is explained by several factors: civil servants tend to be better trained, work more hours, and above all, have accumulated considerable time served in their posts. Somebody employed in a low-skilled position in the public sector earns, on average, considerably more than their equivalent in the private sector.

Recommended Reading :

* Five Spanish regions among EU's top 10 unemployment black-spots

* Spain to spend EU450 Mln on youth wage subsidies

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