What 21.37 euros measure — and what they do not
The figure is not a wage. Labour cost per hour covers everything an employer spends on an hour of work: gross pay including supplements and payments in kind, employers' social security contributions, severance and ancillary costs. That sum is divided by the hours actually worked. Of the Canary 21.37 euros, 15.46 are the wage component and 5.91 the other costs; nationally the split is 19.42 and 6.76 euros (INE, table 6062). The wage component is gross as well. Nor is this the median pay of 20,631.84 euros we reported yesterday: that comes from the annual earnings structure survey, measures gross annual pay per employee and refers to 2024. Here we have a quarterly survey of workplaces, employer cost per hour, and the second quarter of 2026.
155.4 hours — and 25 of them are lost
Contracted hours were 155.4 per worker per month, hours actually worked 130.4. The difference is 25.5 hours not worked minus 0.5 hours of overtime. No other part of the country loses as many; the national figure is 22.7, the Balearic one 19.7. What they consist of, the INE publishes only nationally: 8.5 hours of sick leave, 8.2 of public holidays, 3.6 of annual leave (table 6044). By community the causes do not appear, so the Canary excess cannot be assigned. Nor is the record a part-time effect: among full-time contracts alone the Canaries lead with 170.6 hours ahead of Madrid (169.0), against 168.2 nationally. One caveat applies to every ranking here: both tables have 18 rows — Spain and 17 autonomous communities, without Ceuta and Melilla. The coverage is industry, construction and services, excluding households as employers and extraterritorial bodies.
Why the hour costs least here
The first half of the explanation is the sectoral structure. According to the INE labour force survey, in the second quarter of 2026 41.9 per cent of Canary workers were in trade, transport and hospitality against 28.1 per cent nationally; in industry 4.6 instead of 13.6, in finance 1.4 instead of 2.3 per cent (our share calculation; the divisors are 1,035,500 workers in the Canaries and 22,779,000 in Spain). The price tags of those sectors differ sharply: in the Spanish average an hour cost 16.85 euros in hospitality — the lowest of all economic sections —, 44.51 in finance and 49.60 in energy supply (table 6036). Then there is establishment size: 1 to 49 employees 21.13 euros, 200 or more 31.62 (table 6035). Both breakdowns exist only for Spain as a whole. That makes the long month the more remarkable: services have the shortest month nationally at 148.0 hours against 165.2 in industry — the Canary structure would lead one to expect a short month.
The Balearic puzzle
The Balearics are the best comparison: an archipelago as well, a tourism economy as well, and with 155.2 contracted hours practically the same working month. There the hour costs 24.19 euros, 13.2 per cent more (our calculation, table 6062), and not only once: in all thirteen quarters since mid-2023 they have been ahead. Three explanations can be ruled out. It is not the sectoral structure — 42.8 per cent there work in trade, transport and hospitality and 4.2 per cent in industry, almost the same shares. It is not the hours: the Balearics work six hours more (136.4), which pushes their hourly figure down. And it is not the broad sectors: within services too the gap remains, 24.36 against 21.42 euros. What is left is the wage component itself, 17.80 against 15.46 euros. What lies behind it — collective agreements, hotel categories, firm sizes — the published tables do not show: the INE does not cross labour cost by community and economic section, establishment size or contract type.
The case on the other side
The low cost base is, alongside the REF tax regime and the ZEC special zone, the archipelago's main competitive instrument. It makes Canary beds and menus cheaper than Balearic ones, and it belongs to a labour market that in the first quarter of 2026 reached its lowest unemployment rate since 2007 (INE, labour force survey). A low hourly rate is only a disadvantage if output per hour is not correspondingly low, and on that the survey says nothing. Netting the two against each other is not permissible: the cost series is nominal, output series are real, and the difference would not be productivity. The gap barely moves: in the second quarter of 2025 the Canaries stood at 20.26 euros, 81.1 per cent of the Spanish figure of 24.99, and now at 81.6 per cent (our calculation, table 6062). Whether that becomes a trend, four quarters cannot say.