A study by the CCOO union calculates that the average gross salary in the Balearics is 8,500 euros below what is needed for a decent standard of living.
The union gives an average of 23,100 euros; the minimum should be 31,646 euros. The result is a structural mismatch between pay and the cost of living that has widened over the last ten years and which explains why a growing part of the employed population is struggling to make ends meet despite the strength of employment on the islands.
Housing costs, according to the study, can absorb almost 80% of the average salary, a figure that illustrates the magnitude of the problem.
Faced with this situation, the union is calling for sustained salary increases within the framework of collective bargaining agreements and for intervention in the housing market. It wants the Balearics to be declared a high-demand (or stressed) area, with rent caps and decisive action to increase the stock of public housing. (The Balearic Government has consistently stated that it will not adopt rent caps.)
On salaries, the union argues that to compensate for the real cost of living, these should have increased by 14% over the past year. The hospitality industry agreement that was struck last year was for 13.5% over three years. The renewal of other agreements are for similar percentage increases. In the case of the retail sector, unions are looking for 17% over four years.
It also proposes measures to contain food prices through a basic food basket with price caps and by making transportation more affordable through structural improvements to public transport and mandatory connections to the mainland.
The report warns that so long as the average salary remains so far removed from the real cost of living, the Balearics will consolidate a model in which having a job does not guarantee decent living standards, a paradox that is becoming increasingly evident in one of Spain's most dynamic economies.