Total compensation paid to Spanish executives has surged 60 percent since 2008, while public sector salaries have stagnated and the private sector has seen its payout fall by around 11 percent over the same period, according to the latest figures from the nation’s tax agency.

The trend is significant because governments across the euro zone are trying to fend off populism fueled by inequality – in Spain it’s incarnated by the anti-austerity Podemos movement – while the European Central Bank is betting that a stronger economy will translate into a tighter labor market, reducing slack and pushing up wages to help it achieve its inflation goal of close but below 2 percent.

Valentin Bote, head of research at recruitment agency Randstad in Madrid, said there’s no doubt that the private sector has been hit the hardest. Data from the tax agency shows that Spain’s private sector workers earned a gross average of 22,742 euros ($26,700) in 2016. That’s down from just over 23,000 euros in 2008, when the economic crisis erupted.

The drop in salaries intensified in 2012, when the government introduced sweeping reforms to liberalize the labor market and reduce the power of unions in collective bargaining. In the public sector, where pay checks remained constant throughout the crisis and were less exposed to job cuts, civil servants received an average of approximately 34,200 euros in annual compensation last year.

Having urged prudence, Spain’s minority government says the time has come to raise wages now that unemployment is falling markedly as the economy extends a three-year recovery. That call still hasn’t translated into an agreement between unions and businesses, which have failed to reach a pay deal for 2017.

Source: Bloomberg 11 August Maria Tadeo and Ainhoa Goyeneche www.bloomberg.com