Average retirement pensions in Spain have surpassed the country's most common salary, according to University of Barcelona economics professor Gonzalo Bernardos.
The economist stated that this trend challenges the traditional expectation that remaining in employment yields higher income than retiring, attributing the shift to a combination of generous state pension payouts and persistently low wages across the Spanish labor market.
Addressing the disparity, Bernardos explained that the outcome stems from two simultaneous economic phenomena rather than a single cause. Spain, a member state of the European Union in southwestern Europe, maintains a retirement framework with some of the highest income replacement ratios among developed economies.
Generous pension replacement rates in Europe
Spanish retirees collect an average of 83.5 percent of their final working salary, according to Bernardos. He noted that this percentage is significantly higher than in other major European nations, including Germany, where the average replacement rate reaches 53 percent.
Germany represents Europe's largest national economy, making its lower payout percentage a standard benchmark for comparison within the European monetary zone. Bernardos said that Spain's higher payout ratio allows many former workers to maintain a high level of income after exiting the workforce.
Impact of minimum wage and part-time work
On the salary side of the comparison, Bernardos pointed out that Spain's most frequent wage level is heavily suppressed by structural factors in the job market. He highlighted the growing proportion of workers earning the statutory national minimum wage, known in Spain as the salario minimo interprofesional.
Successive increases to the national minimum wage in recent years have expanded the volume of employees working at that baseline threshold. At the same time, part-time employment continues to affect a substantial share of the active working population, concentrating earnings in lower pay brackets.
Two decades of stagnant wage growth
The economist linked current wage levels to broader trends over the last two decades following the 2008 global financial crisis. Although employment numbers have recovered in certain sectors, Bernardos stated that Spanish workers have failed to regain the purchasing power they held in 2007.
Bernardos described the decade following the 2008 economic downturn as a lost decade for a large share of wage earners. In contrast, he stated that retirees remained better protected due to statutory adjustments in pension benefits.
He concluded that the gap between retirement income and typical salaries does not indicate that pensions are extraordinarily low or that salaries are unusually high, but rather reflects the ongoing combination of high pension replacement rates and modest standard pay.
