Employers and unions have agreed on a 10% salary increase just at the time when the weight of wages in the Spanish economy has reached its lowest level since 2018. During the first quarter of the year, wage earners represented 45.8% of GDP (everything produced in a year in the country). On the other hand, the share of the pie taken by employers remains at the highest level also since 2018, with the exception of the last part of last year, when it was still higher. It closed the first quarter at 43.8%. This process already began in the final part of 2022, so it is possible that it will intensify in the coming quarters.
The figures, which are extracted from the GDP data published last week, come after unions demanded during May Day (with several ministers) a more appropriate distribution of profits between company ownership and workers. Something that was agreed on Friday. The unions have also asked for an observatory of business margins, which the employer rejects. Carlos MartÃn, director of the economic studies office of CC.OO., emphasized that the data show that price control is necessary because “companies are managing to capture all the income”, unlike wage earners. MartÃn explains that thanks to public transfers via budgets, it is achieved that citizens can consume higher prices and this money ends up in companies. When pensions or the SMI (minimum interprofessional wage) are raised, the final beneficiary is the companies, which end up getting more income with the rise in prices, reflects MartÃn, who believes that this process can be seen in the distribution of wages and benefits in GDP.
Although the aforementioned statistic is not precise, it is the best approximation to determine what part of the pie is taken by the workers through wages (employee compensation) and what part is owned by the companies (operating surplus ). MartÃn explains that the remuneration data includes what the self-employed without employees in their charge perceive. Without these figures, the weight of salaries would be even lower, he adds.
On the other hand, sources from the employers’ association CEOE state that business surpluses are not 100% comparable to the profits obtained by companies and add that they incorporate other concepts, such as rental income. According to the employers’ organization, it is better to analyze this type of statistics over long periods, and they warn that in recent years they have been greatly affected by covid. The CEOE adds that, once a long period of 10 years has been analyzed, the distribution between remuneration and business profits is more balanced.
As can be seen in the graphs, the weight of remuneration (always in relation to GDP) grows during the covid pandemic, a common behavior in situations of this type. The theory defended by CaixaBank Research in a recent report is that labor income in GDP has a counter-cyclical behavior, so that in periods of recession companies are more likely to retain their workers as long as they can by keeping them you are This causes the weight of remuneration to grow. On the other hand, in the phases of expansion or exit from the crisis, such as those of the last quarters, it is the business surplus that behaves better. And he earns a bigger percentage of the pie.
CaixaBank has also analyzed the behavior of labor incomes during the covid and what happened during the great financial crisis of 2007. It is different because the fact that in 2020 employment was maintained with public support while the GDP collapsed due to confinement, the weight of labor income increased by 5 points. This increase has now been undone.
The statistics are also published disaggregated by autonomous communities, although the latest data available correspond to 2022. In the case of Catalonia, the pattern is very similar to that of Spain as a whole. Last year, the weight of wage earners on total GDP was 46.8%. It is the lowest level since 2019, just before the pandemic began. On the other hand, in the case of business surpluses, participation was 44.8%. It is the highest since 2018. Probably during the first quarter these trends have intensified.
