A new report released by the Juan de Mariana Institute, a liberal think tank, suggests that more than half of the total cost associated with employing an average worker in Spain is directed to public authorities. The study, which the think tank describes as an "economic autopsy" of Prime Minister Pedro Sánchez's time in office, according to The Objective, estimates that for every €100 in labour costs, the tax burden amounts to €53.60.
Diego Sánchez de la Cruz, the institute's head of research, calculated that out of an average annual labour cost of €39,481, approximately €21,144 is consumed by income tax, social security contributions, VAT, and other levies. This comprehensive calculation uses the employer's total labour cost as its baseline rather than just the gross salary. Since 2018, the institute notes, it has documented 141 individual tax increases.
The findings indicate that revenue from taxes and social security has climbed by 39.7% since 2018, representing a nominal rise of roughly €168.17 billion. Furthermore, the tax-to-GDP ratio has shifted from 34.9% to 37.1%. The report suggests that the average taxpayer contributes €460,600 in taxes over their lifetime, a sum equivalent to 16.4 years of the average salary or nearly 30 years of the most common salary in Spain.
While acknowledging that government spending on healthcare and education has grown by 43% and 40% respectively, the report argues that public service quality has seen a decline. It highlights that surgical waiting lists have expanded by 28%, reaching 853,509 patients with an average wait time of 102 days to see a specialist. Additionally, the study references results from the 2025 PISA report to support its claims regarding service deterioration.
Economic challenges highlighted by the institute include a public debt that has reached €1.763 trillion, an increase of approximately €600 billion over the past eight years. The study also points out that one out of every four euros allocated to pensions is currently funded by government contributions. Housing issues are also addressed, noting that the median rent of €1,080 has surpassed the median salary of a young worker at €1,048. Only 15.2% of young people in Spain now live independently, the lowest rate recorded since 2006. The author attributes this to a supply-demand imbalance, noting that 1.16 million new households have been formed since 2021, while only 465,000 homes have been completed on the open market. The report further criticizes rent caps introduced under national housing law, linking them to sharp declines in new rental contracts in cities like Barcelona, Navarre, and A Coruña.
On the labor front, the institute acknowledges a 66% rise in the minimum wage but warns this has resulted in "unprecedented wage compression." It also suggests that official unemployment statistics are distorted by inactive workers held on permanent seasonal contracts. The report concludes by characterizing the current political period as "devastating," while criticizing the state's handling of crises such as the Covid-19 pandemic, the DANA floods, and the situation in Ceuta. These findings were published shortly after Prime Minister Sánchez called for an early general election following the defeat of his government's decrees.
