Economic Growth in Spain Fails to Improve Citizens' Well-Being Amid Rising Costs
Despite Spain's strong economic growth, rising costs and stagnant wages leave many citizens and farmers struggling, highlighting urgent social and economic policy needs.
- • Spain's GDP grew nearly 13% from 2021 to 2024, but wages only increased 5.1%, leading to a decline in real wages due to inflation.
- • 4.3 million Spaniards face severe exclusion despite economic growth, with high poverty risk.
- • Minimum wage rose 3.1% in 2026, significantly raising labor costs and affecting agricultural competitiveness.
- • Farmers call for tax benefits or Social Security bonuses to offset increased costs and prevent rural abandonment.
Key details
Spain is currently experiencing significant economic growth, with its GDP increasing nearly 13% from 2021 to 2024, yet this growth has not translated into improved living conditions for many citizens. Despite Spain leading growth in the Eurozone, it remains the third highest in the European Union for poverty risk, with 4.3 million people facing severe social exclusion. Economic expert Alberto Montero highlighted that while corporate profits increased by 6.5%, wage growth has been limited to 5.1%, effectively resulting in a decline in real wages of about one percentage point due to inflation pressures exacerbated by the Ukraine war.
Fernando Luján, deputy secretary general of union policy at UGT, underscored that wages near the minimum wage have stagnated and called for a general annual wage increase of 4% over the next three years to offset the disconnect between economic indicators and citizens' realities. Luján also emphasized the need to treat housing as a universal right, advocating for state intervention to ensure access to dignified housing.
The agricultural sector, a key employment source where 31% of minimum wage earners work, faces acute challenges amid rising production costs. Labor costs have surged following a 3.1% minimum wage increase in 2026, with total labor costs now ten times higher than those in Morocco and 30% higher than in Portugal. This escalation, coupled with over 20% increases in prices for fertilizer, seeds, and herbicides since before the Ukraine conflict, threatens farm profitability and competitiveness, prompting protests from farmers and ranchers. With 40% of farm owners over 65 and the sector's contribution to GDP declining from 6.9% in 1985 to 2.6% in 2025, the future of Spain’s agricultural sustainability and food security is uncertain.
Calls are growing for compensatory measures such as tax benefits or Social Security bonuses to support farmers affected by increased wage costs. Although the Food Chain Law mandates payment of at least production costs, many operators remain unprofitable due to high fixed costs and labor burdens.
Both experts and agricultural representatives agree on the urgent need for enhanced public policies focused on wealth redistribution, wage improvements, housing rights, and the economic viability of agriculture to bridge the gap between Spain’s economic growth and the well-being of its population.
This article was translated and synthesized from Spanish sources, providing English-speaking readers with local perspectives.
