The average gross salary in the Balearic Islands is €8,500 (£7,400) below what is needed for a decent standard of living in the archipelago, a new study has revealed. The CCOO (Workers’ Commissions Union) has stated that the average salary for a worker in the Balearics, which comprises the popular tourist islands of Majorca, Ibiza, Menorca and Formentera, is currently €23,100 (£20,090).

However, the minimum should be at least €31,646 (£27,522) – 37% higher – it warned. The result, it added, is a widening gap between wages and the cost of living. This 10-year trend goes a long way to explain why more workers are struggling to get by, even though the archipelago’s job market remains strong. According to the study, housing costs can now absorb almost 80% of the average salary.

As a result, the CCOO 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. However, the government has consistently stated that it will not adopt rent caps.

Regarding salaries, the union argued that, to compensate for the real cost of living, they 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 is for similar percentage increases. In the retail sector, unions are seeking 17% over four years, according to the Majorca Daily Bulletin.

It has also proposed 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 end up with a model in which having a job does not guarantee decent living standards.

Majorca’s limited land and strict planning laws have created a permanent shortage, but on top of this, available stock is increasingly used for profit. Thousands of apartments have been converted into short-term rentals. In 2024, it was estimated that for every one new apartment built, three new households were formed. About a third of property purchases are made by non-residents, primarily from Germany, the UK and Scandinavia.

Meanwhile, while there are plenty of jobs in the Balearics, they are largely in the service and hospitality sectors, which have not seen significant pay increases. The average net monthly salary in 2025 hovers around €1,750 (£1,522) to €1,800 (£1,565), but a decent two-bedroom apartment in Palma now costs between €1,100 (£957) and €1,500 (£1,305).