On June 2, 2026, Social Security announced a data point without precedent in the history of the Spanish labor market: 22,337,806 people affiliated to Social Security, the absolute historical maximum of the series, with 553,431 contributors more than a year ago — a year-on-year growth rate of 2.54%, the highest in more than two years — and 64 consecutive months of job creation in the seasonally adjusted series. And yet, the success of the employment data does not hide the low wage segment in which millions move, perhaps the majority of workers in the Spanish state, and that raises the following challenge: how to modify the productive and wage structure of the labor market to achieve higher wages and purchasing power?
Against years of structural unemployment and a stagnant minimum wage, Spanish society has managed to transform the labor market. There remains now a major challenge ahead: transform the productive matrix and advance wages.
A transformation without precedent
The employment cycle we are experiencing has no parallel in recent history. The highest ever employment rate, 67.5%, has managed to reduce the unemployment rate by 1.2 percentage points in the last year to levels not seen since mid-2008. More people in the labor force, more people employed, and less unemployment. The 2021 labor reform (whose debates and passage I lived through firsthand as a legislator and as president of the House of Representatives’ Labor Committee) fulfilled its central promise: more stable contracts with less structural temporality than at any previous moment of the democracy. Those under twenty-five reduced their unemployment rate from 46.25% in 2015 to 24.90% in 2024. Female employment has reached historic highs. Unemployment among women fell by 167,100 in 2024, a 10.9% drop.
“A regulated economy and labor market, but also nourished and fed by public intervention, have shown that they progress”
The interprofessional minimum wage has followed a similarly significant path. The minimum wage has risen by 61% between 2018 and 2025, one of the sharpest increases in the EU. The 2026 minimum wage was set at 1,221 euros gross per month in fourteen installments, versus 735 euros in 2018. These are incontrovertible data that surpass any ideological bias and that directly impact the tangible lives of millions of workers. In any case, these figures are not the result of a spontaneous cycle. They are the product of public policies and economic decisions: labor reform, increases in the minimum wage, strengthened collective bargaining, active employment policies, a positive willingness to incorporate migratory flows at a state level. An economy and a labor market regulated, but also nourished and irrigated by public intervention, have shown that they advance, turning Spain into a reference European economy.
It is evident that the advances achieved should not hide the significant challenges: youth unemployment, territorial inequalities, involuntary part-time work and forms of precarity that continue to affect especially women, migrants and certain age groups; but the transformation of the labor market, with a decisive push from the minimum wage, is a reality.
The locomotive that no one expected
The macroeconomic performance of the Spanish state in these years astonishes on the international stage. “Spain’s economy has grown steadily in the last years, surpassing European peers” (the Spanish economy has grown steadily in recent years, surpassing other European countries), in the words of Mathias Cormann, Secretary-General of the OECD. Through 2025, Spain was systematically Europe’s growth locomotive. In the second quarter it grew 2.8% year-on-year — double the euro area — while Germany and Italy recorded contractions. In the fourth quarter it closed the year with the best figure among the bloc’s major economies, 0.8%, triple France and more than double Germany and Italy. The IMF expects Spain to continue as the locomotive of European growth in 2026 and 2027, with the largest upward revisions of all advanced economies. Spain grows. Italy stagnates. France and Germany retreat.
“An excessively productive base oriented toward low value-added sectors — tourism, hospitality, retail — generates employment in quantity, but not in wage quality”
However, the average net salary stands at 22,000 euros per year, compared with 30,000 in France and 32,500 in Germany. The economy that leads European growth is also one of the worst at remunerating work among the bloc’s large economies. An over-reliance on sectors with low added value — tourism, hospitality, commerce — yields abundant employment but not wage growth. The challenge, therefore, is not merely to keep creating jobs, but to create them in another way. To combine a more effective redistribution of corporate profits —which in this cycle have reached historic highs— with a gradual but decisive transformation of the productive fabric toward sectors and activities with higher added value.
The pending challenge: from quantity to quality
Behind the employment record lies a question that headlines do not answer: what do these twenty-two million people live on? The answer, when broken down, presents a controversial snapshot. One in four wage earners earns between 14,000 and 20,000 euros gross per year — between 900 and 1,300 euros net per month—, in a country where the average rent in provincial capitals has risen by more than 50% in the last decade. The most common salary, the one that employs the most people, is 1,100 euros net per month. With that figure, in Madrid or Barcelona, rent consumes between 60% and 80% of the salary. In medium-sized cities, between 40% and 50%.
Macro aggregates tend to obscure this reality. Half of wage earners do not exceed 2,000 euros gross per month, and three in ten earn less than 1,582 euros gross. Paired with an accumulated CPI above 20% since 2021 and with the average housing cost exceeding 40% of income in municipalities with more than 100,000 inhabitants, these figures sketch a reality of millions who work, who contribute, who sustain the record growth of the economy with their effort and who, nevertheless, struggle to make ends meet each month.
The policy of good salaries
Once major problems in access to employment have been mitigated, how to structurally address the productive shifts that will shape a near and accessible future country of good salaries?
Improving purchasing power and wages is key to consolidating the positive growth phase of the economy. But, for that to happen, growth cannot continue to rely on the extensive incorporation of labor while corporate margins reach historic highs and the transformation of the productive matrix —and this is fundamental— is not addressed.
The path to the country of good salaries has, at least, three mutually reinforcing axes. The first is investment in sectors of greater technological complexity — renewables, industry, technology, high-value agri-food activity — that generate jobs whose structural remuneration is higher. The second is the strengthening of collective bargaining and the action of public authorities so that productivity improvements are effectively translated into wages and not only into benefits distributed to shareholders. The third is training: a economy that aspires to higher value-added jobs needs qualified workers to fill them, which requires sustained investment in education, vocational training and retraining.
“The debate about good salaries also obliges considering more ambitious redistribution instruments
Obviously, the debate about good salaries also obliges considering more ambitious redistribution instruments, such as workers’ participation in company dividends, addressing the demand for time of life by reducing working hours, the need for reinforced taxation on incomes and extraordinary profits, or a more active role for the public sector in strategic areas.
Be that as it may, the society has shown that it knows how to transform itself. The current labor market is the most compelling proof that structural changes are possible when key actors are willing to drive them. The next transformation, that of the productive model, is slower, more complex and more difficult to see in a single Labour Force Survey (Encuesta de Población Activa) or in a single GDP figure.
However, it is precisely the one that will determine whether, within a decade, we continue to celebrate the same employment records or we also begin to celebrate that wages enable dignified living. Twenty-two million people work today in Spain. The challenge now is that all of them — and those who come — can work and live better.
