A new year is approaching and many workers and companies are addressing a key discussion: salary increases. Also the Government itself, which is facing the debate on increasing the interprofessional minimum wage. When raising the SMI, the Government usually takes into account several factors, such as the evolution of prices, but also how much overall salaries have increased. Although it may seem surprising, this second point does not have a univocal answer, but rather there are different figures – sometimes even very different – depending on the statistics consulted.
This is what has happened, for example, with the latest salary results published by the Active Population Survey (EPA), which were surprising with quite extraordinary data, however high. INE statistics indicate that the average monthly salary increased by 7.3% last year, the largest increase in fifteen years. The figure is much higher than the increase offered by other statistical sources for 2023, such as the Tax Agency (5.3%) or the signing of collective agreements (3.5%).
“Each statistic is good for some things, there is always something they don’t cover, so we still need the crossover between them. I think it is the solution,” said economist Laura Hospido this week, a researcher at the Bank of Spain and CEMFI, who currently advises the Ministry of Economy.
With a large table with 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 relevant is that a large part of the statistics do not provide data on the hours of work linked to these salaries, a key element for the analysis of salaries, he indicated in some conferences organized by the CSIC, the INE and Fedea.
Salaries recover purchasing power
Thus, to answer the question “how much are salaries rising?”, in general, labor market specialists highlight that workers are recovering purchasing power after the worst of the inflationary crisis (in 2021 and 2022).
“Salary increases usually correlate quite well with inflation from the previous year, possibly due to how increases are negotiated by agreement. On that premise, wages rising a lot in 2023 was expected after 2022 had the highest inflation in decades,” argues Ángel Talavera, chief economist for Europe at Oxford Economics.
In May 2023, the major collective bargaining agreement was signed between employers and the unions, with recommendations for salary increases at the state level that accelerated the signing of collective agreements.
However, if we want to give a specific figure for salary increases, the task becomes a little more complicated. “The problem is that there are many series of salaries giving different data,” Talavera acknowledges. The key here is to look at what exactly the statistic we consult measures and where it obtains the information from.
For example, the Salary Structure Survey (EES) published by the INE It is the most detailed in information on remuneration (especially the four-yearly one), but it is always very late. The latest available results correspond to 2022. This places the average annual salary at 26,949 gross euros per worker in 2022, 4% higher than the previous year.
From 2023, there are recent data from two statistics. The from the Tax Agencywhich places the average annual salary at 23,980 euros gross, with an increase of 5.3% compared to the previous year. And, as noted, those of the Active Population 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 is happening in 2024, we can turn to the provisional statistics of the increases that are being agreed in the 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 of 2023).
Also offers data for the current year the Quarterly Statistics on Labor Costs (ETCL)published by the INE, with a perspective more focused on the company. This includes an increase in the “salary cost” of 4% in the second quarter of 2024 compared to the same period of the previous year.
We don’t just talk about salary: jobs, hours
Given such a variety of data, there are those who may think that some statistics – or even all – are wrong, or that they provide incorrect information. However, as noted before, in general what happens is that each one is based on different sources of information and they offer us different information.
For example, one thing is the salary increase that is agreed upon in a collective agreement, another is the salary increase that is finally applied to a specific employee on his payroll (let’s imagine that he benefits from a promotion or an individualized improvement), and another different is the money that a person ultimately takes home in income from work, which is influenced not only by salary increases, but also by factors such as how many hours or days they work or if they change contracts, to give a few examples.
And we must also remember that, behind the average data for all workers, there are very different situations and that jobs also change. In recent years, for example, the number of personnel in some sectors with more added value, such as scientific and technical professions, has increased greatly.
Thus, Alberto del Pozo, economist of the UGT economic cabinet, considers that the extraordinary increase of 7% that the EPA collects in the monthly salary is due to “a sum of several things.” In the absence of a more detailed analysis, he senses that there may be a certain “corkage effect” of collective agreements in 2023, after the great salary pact, and also a possible “carryover” derived from the increase in the interprofessional minimum wage (SMI), which that year was 8%, among other factors.
In the economic cabinet of CCOO, Álvaro Gaertner agree that the increase reflected in the EPA provides information about other circumstances that are being experienced in the labor market. In their case, they highlight the stabilization of many temporary contracts with the labor reform, with an improvement in conditions for thousands of workers.
The detailed data from the Salary Structure Survey from 2022, analyzed by elDiario.es, point to this direction, which shows a much greater increase in the lowest salaries, those that reduce the temporality the most and increase their hours or days the most. worked.
Gaertner also recalls that some companies and sectors may be applying “efficiency wages”, with higher pay increases where it is more difficult to find workers, to retain their staff.
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