Spain Recognized by ILO as One of the Wealthiest Countries with Low Wage Inequality

The inflation crisis that impacted numerous countries worldwide during 2022 and 2023 has seen a general recovery as of the past year. Evidence of this recovery is reflected in the fact that after a prolonged period of rising prices, which led to negative growth in real wages, nominal average salaries globally have once again surpassed inflation rates, resulting in increased purchasing power for many nations. Specifically, real average wages (adjusted for inflation) rose by an average of 2.7% worldwide, marking the highest increase in 15 years. Excluding China, whose rapid economic growth skews global data, real wage growth worldwide was recorded at 2.3% in 2024.

This information comes from the ninth edition of the World Wage Report 2024-2025 published by the International Labour Organization (ILO), which released its regional conclusions in late November and detailed country-specific findings this past Wednesday. The report also examines the state of wage equity globally, highlighting Spain's favorable position among high-income countries with the least wage inequality. In Spain, the top 10% of earners account for 23% of total salary mass, while the bottom 10% earn merely 0.5%. This disparity is 15 percentage points higher than the global average, where the top 10% earners capture 38% of total wages.

In Spain, real wages decreased by 3.5% in 2022 before rebounding in 2023 with growth rates of 1.4% and an estimated 0.6% for 2024. However, this recovery remains slightly below the average growth experienced within G20 advanced economies, as noted by the ILO. The cumulative wage growth over 2022 and 2023 has not fully compensated for the loss of purchasing power in 2022, leaving it 1.5 percentage points lower than before.

The ILO's report also delves into the internal wage inequality levels across various nations. By analyzing hourly wages in 82 countries, representing about 76% of the global wage-earning population, the report illustrates significant disparities in wage inequality between nations, particularly affecting lower-income states. The assessment reveals that almost 22% of wage earners in low-income countries earn less than half of their country's median hourly wage, while this figure drops to 17%, 11%, and 3% for lower-middle-income, upper-middle-income, and high-income countries, respectively.

Spain falls into the high-income category, where only 1.3% of wage earners earn below half of the median wage. Among the thirty high-income countries analyzed by the ILO, Spain ranks as one of the eleven nations with the least wage inequality. The only countries with lower wage inequity are Luxembourg (0.9%), Italy (0.9%), Iceland (0.5%), Slovakia (0.4%), Finland (0.2%), Lithuania (0.1%), Sweden (0.1%), Poland (0.04%), Belgium (0.04%), and Portugal (0.04%).

The ILO attributes Spain's favorable position regarding wage inequality to the implementation and levels of the national minimum wage. The report emphasizes that in high-income nations, compliance with minimum wage standards is notably high compared to countries with lower GDP volumes, resulting in a small percentage of wage earners earning below half of the median wage.

Furthermore, the report analyzes the progression of wage inequality across countries, noting that while overall wage disparities have decreased, this reduction is primarily due to significant salary declines at the upper end of the wage scale. In Spain, since the early 2000s, real average wages have increased between 0.2% and 0.6% across most wage brackets, with the exception of the highest percentiles, which have experienced real wage declines between 0.2% and 1.2%.

Alongside the decrease in purchasing power for higher wage earners, women and migrant workers also face greater challenges related to wage inequality. Women constitute 47.7% of all wage earners in Spain, a figure that rises to 60% among low-income earners, defined as those earning less than half of the median hourly wage. This overrepresentation of women among low-wage workers is higher than the average for high-income countries, where it is estimated at 56%.

Similarly, migrant wage earners are disproportionately represented among low-income workers in both upper-middle-income and high-income countries. In Spain, migrant workers make up 26% of low-income wage earners, while they account for only 17.6% of total wage earners.