Average annual Spanish salary falls to lowest level since 2007

Tax filings by Spanish companies show that the average annual salary of a worker last year was €18,420, the lowest since 2007.

Salaries withstood the economic crisis relatively strongly until 2011, but dropped significantly the following year, when the government introduced a sweeping labor reform.

The drops continued in 2013 and 2014, according to figures released on Tuesday by the Finance Ministry.

The highest average salaries are in Madrid and the lowest are in Extremadura

However, the average salary of the highest earners – those who take home more than 10 times the minimum wage – continued to grow throughout the crisis. In 2014, the 127,706 people in this group made an average €148,824.

The statistics paint a picture of inequality and precarious employment, but also point to job creation.

For the first time since the crisis hit Spain in 2008, there was a spike in the number of salaried workers included in the 2014 report Mercado de trabajo y pensiones en las fuentes tributarias (or, The job market and pensions in tax sources). This number grew to 16,899,024 individuals, 217,000 more than in 2013.

But it bears noting that the report’s figures also include income received by pensioners and students for occasional work, and by part-time and seasonal workers. This brings down the overall annual average, which could make it seem like over a third of workers in Spain make less than the minimum wage of €9,034,20 a year.

An analysis of the 2014 data suggests that the drop in the average annual salary is not so much the result of salary cuts but due to the addition of new workers whose starting wages are at the lower end of the scale.

Broken down into regions, the highest average salaries are to be found in Madrid (€24,576), and the lowest in Extremadura (€13,559).

English version by Susana Urra.