Spanish average salary loses nearly €300 in purchasing power

by Lorraine Williamson
average salary in Spain is less
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In fifty years, the fall in the average salary compared to the previous year has never been so great as in the past year. At the end of 2020, the average salary in Spain fell by more than 3% and was only €1,641 gross. 

This is evident from the Spanish statistical office INE data used for the annual report on employment in Spain. When set against the consumer price index (CPI), this wage reduction results in a loss of 1.4% of purchasing power. Consequently, the average salary can purchase €280 less annually compared to two years ago. Purchasing power then increased by almost a percentage point compared to the two years before. 

Average salary highest in Madrid, Basque Country and Navarre 

This year’s decline in purchasing power put an end to the trend of continuous increases since 2017. The decline in the average gross monthly salary occurred in Spain in all autonomous regions. With the exception, however of La Rioja, where in the year of the pandemic the average salary rose by 1%. The average gross salary is highest in the Madrid region at €1,964 per month. This is followed by the Basque Country region (€1,954and Navarre (€1,837). The decreases in these three areas were of 1.3%, 1.5% and 0.7% respectively. 

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Salaries lowest in Canary Islands 

The Canary Islands have the lowest average salary at €1,281 gross per month (down 12.8% compared to the previous period). This is followed by Extremadura with €1,338 gross per month (down 2.7%). Furthermore, the largest percentage drop in the average salary, was the Balearic Islands with no less than 13.2% in salary losses. As mentioned, followed by the Canary Islands with a decrease of 12.8%.  In the last quarter of 2020, the average salary on both island groups was the same as in 2007. The distribution of the fall in income within Spain clearly shows that it is greatest in the regions where the most ERTE temporary unemployment schemes are in placesuch as that was the case on both island groups.

In the regions of AndalusiaCastile-La Mancha and Murcia, the trend is opposite: a year ago purchasing power declined here, but it is now recovering. However, the recovery is greatest is the Murcia region, with an increase in purchasing power of 1.8% compared to a year ago. 

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