Real wages will fall 4.4% this year in Spain, the largest loss of purchasing power in the OECD

• The unemployment rate in Spain continues to double the European average despite the increase in affiliation

in

-nominal

wages once inflation

in the country this year due to the combined effect of a scant revaluation of wages and a high rise in prices, which makes Spain in

for its workers.

According to the report on

of this organization, published this Friday, the recovery of the labor market in 2021 generated labor

in the tourism, agriculture, construction and technology sectors.

This contributed to the increase in nominal wages in 2021, but in a context of accelerating inflation -which closed the year at an average of 3.1%- it was not enough to protect purchasing power.

"

and is expected to continue to fall by 4.4% in 2022," they warn.

"This represents

among countries for which data is available, and a substantial cut in workers' purchasing power, as Spanish consumer prices are rising to record highs," points out the organization directed by the Belgian

The loss of purchasing power of wages will be lower in other countries such as

-around 3%-,

-2.5%-,

-0.6%- or

-0.4%-.

The OECD focuses on the impact of the loss of purchasing power in households with lower income levels.

"The impact of rising inflation on real income is greater for

that have already borne the brunt of the COVID-19 crisis. In fact, the increased spending resulting from recent price changes of food and energy represents a larger share of real income for lower-income households, and these households have

or reducing discretionary spending.

While these households from the lowest income deciles are more exposed to inflation, because they allocate

the fact is that they include much more proportion to

, "who were most likely to see their incomes reduced during the COVID-19 crisis, either through job loss or reduced hours worked."

Youth unemployment still exceeds that of 2019

In addition to highlighting the problem of loss of purchasing power suffered by workers in Spain, the OECD highlights another complication of the labor market related to

The organization recalls that, although employment has exceeded pre-pandemic levels in Spain, the same has not happened with the level of

, which is still

than it was before the outbreak of covid -19.

"Despite the recovery of the labor market in Spain,

and entry into the labor market is

. The youth employment rate remains below the pre-crisis level (1.5 percentage points lower in the first quarter of 2022 compared to the last quarter of 2019), primarily as a result of

service sector jobs, such as accommodation and food, administration, commerce, and transportation", they detail.

The

rate in Spain fell from its peak of 16.4% (in September 2020) to

and is below the pre-crisis level (13.9% in December 2019).

In general terms, the organization considers that the Spanish labor market has recovered strongly after the pandemic, but warns that the war in Ukraine and its economic consequences could cool down the evolution of hiring.

"

against Ukraine, the increase in energy prices and uncertainty, deteriorating business confidence and slowing down the manufacturing and services sectors," they warn.

The OECD recommends targeted aid

Given the increase in inflation and its impact on low incomes, the organization considers that it is "

" for governments

, since "they imply lower fiscal costs, expand less demand in a moment of high inflation and are better adjusted to the green transition", unlike what happens with generalized measures for all households such as the reduction of some taxes -such as VAT on electricity or gas- or discounts on fuels.

"Like other OECD countries, the Spanish government is trying to cushion high inflation by containing the rise in electricity prices through

(non-targeted price support measures)," the organization points out. At the same time, in order to target low-income households, it has launched "a transfer system to help the poorest households pay their energy bills, with an average of around 90 euros per month per household," they point out. .

Although urgency and opportunity may justify a lack of targeting, accepts the OECD, it believes that "governments could consider

This would not only provide help to those most in need, but also

that income support and price reductions

and the transition to a greener economy".

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• Coronavirus

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• Unemployment

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• Inflation

• Wages