Paradox of low wages and high cost of living

But if the average wage is low, the standard of living is high. Housing, to buy or rent, is among the most expensive in Spain. The cost of fuel is the highest. Palma recently emerged as the most expensive city in the country for the average “shopping cart”.

Joan Mayans of the Balearic Service Station Association draws attention to a problem that has simply never been properly addressed. “We have been asking for years that, once and for all, the famous Balearic Islands special economic regime to be approved in order to put us on an equal footing with businesses and consumers on the continent. »

The comparative level of income has not always been like this. In the 1990s, the Balearics could boast of being in the top two regions of the country in terms of per capita income/GDP ratio. The islands have fallen in the ranking partly because of the large population increase – much higher in relative terms than the rest of Spain. But there are also wages.

The Confederation of Professional Associations of the Balearic Islands attributes the paradox of low wages and the high cost of living “to the fact that our economic structure and specializationalthough it has enabled us to achieve high levels of well-being, has failed to evolve and become more sophisticated in order to increase the generation of income, including salaries”.

Pau Monserrat, professor of economics at the University of the Balearic Islands, says the problem lies in the economic model. “It’s eminently touristy, you have to workers with limited training and offers them jobs that are relatively low paid and free of contributions all year round. To change this, you will have to change the model. There must be new ways of managing businesses, of attracting tourists with greater purchasing power, who demand quality services offered by trained professionals. On the other hand, we must progress in improve our business modelfar from that which is essentially based on welcoming and entertaining tourists.”

Luis García Langa, director of Corredordefondos.com, explains that in the Balearic Islands “we have a problem with wages, which are below average, as is the per capita income”. “The standard of living should therefore not be as high, but a little lower than the national average. However, tourismsometimes with per capita incomes and stronger currencies, and new foreign residentswho come from countries with a much higher standard of living, cause certain prices to skyrocket, in particular those of certain products, such as housing. »