Productive, but Not Prosperous: The Paradox Grows

For years we accepted a simple promise: if technology advanced, if companies produced more, if every hour of work generated more value, we would all end up living better. We would work less, earn more, and devote more time to family, leisure, thinking, and living.

Reality has been more uncomfortable. Yes, we work fewer hours than our grandparents. Yes, we have infinitely more powerful tools. Yes, a person with a laptop can do tasks that once required an entire office. But the question is still there, increasingly hard to dodge: if we are more productive, why do so many people feel they are progressing so little?

1. The paradox is no longer only psychological. It is statistical.

Spain has significantly reduced the number of hours worked per employed person. BBVA Research notes that at the end of the nineteenth century people worked close to 3,000 hours a year; in the first quarter of 2024, the figure was about 1,713 on an annualized basis. The OECD places Spain at around 1,634 annual hours per worker in 2024, below the OECD average, close to 1,736. We have gained time. That is undeniable.

But the time gained has not always become felt prosperity. The OECD itself was very clear in its 2024 report on Spain: productivity growth has almost come to a halt. Between 2011 and 2021, Spanish productivity grew by barely 0.5% per year, less than half the OECD average. And when productivity grows little, real wages have little oxygen.

2. Productivity: that is what this is about

Here the first key appears: working less can be a conquest if it is born from higher productivity. But it can become an illusion if it is imposed or celebrated before creating more value per hour.

Rafael Doménech and Íñigo Sagardoy put it precisely: a reduction in working hours only makes sense if it does not damage employment, responds to productivity gains, and improves quality of life. All three at the same time. Not an isolated slogan.

3. Distribution

The second key is distribution. In the United States, the Economic Policy Institute updated its well-known Productivity-Pay Tracker in 2026: between 1979 and 2025, productivity grew by 92.4%, while hourly compensation for the typical worker increased by 33.6%. It is not Spain, but it is a sign of the times.

Growth is not distributed automatically. The old idea that “if the economy grows, everyone rises” does not work as a natural law. Each individual’s growth depends on:

• institutions,
• competition,
• bargaining power,
• human capital,
• the ability to move toward higher-value sectors,
• the tax burden,
• basic household costs (housing, energy, food, transportation),
• those who innovate,
• those who invest,
• those who dominate advanced technologies, ...

Productivity can improve and, even so, a growing share of its fruits can remain elsewhere: business margins, capital income, protected positions, scarce assets, or wages highly concentrated at the top of the distribution.

4. In Spain productivity is low. There is little to distribute

Spain also has an earlier problem: it does not merely distribute some gains imperfectly; something much more serious is happening: in Spain, few gains are generated.

Our business fabric remains too fragmented, with many small companies, low investment in technological capital, uneven productivity across regions, and difficulty transferring innovation to lagging firms.

The OECD insists on this: it is not enough to have leading companies; the challenge is for productivity to spread across the whole economy.

5. An overwhelming tax burden

The third key is the net pocket. The worker does not live from GDP or from gross salary:

• The worker lives from what remains after taxes, social contributions, fees, and so on.
• In addition, basic consumption (housing, energy, food, transportation) carries a significant embedded tax burden.

In 2025, according to the OECD, the tax wedge on labor income for a single worker earning the average wage in Spain reached 41.4% of labor cost, compared with an OECD average of 35.1%. Between what the company pays and what the worker receives there is a considerable distance.

And that 41.4% is only one part of the fiscal cost paid by the worker. Then come other taxes, fees, and charges:

• consumption taxes (VAT),
• excise taxes (fuel, alcohol, tobacco, vehicles), charges on electricity, water, and telecommunications,
• environmental taxes (CO2, plastics),
• inflation (non-indexed income tax brackets, salaries that grow with only part of effective CPI),
• wealth-related taxes (capital gains, inheritance, gifts, property tax, transfer tax, stamp duty, the Tobin tax on financial transactions),
• and more.
• Added together, workers face a state-related cost that ranges between 60% and 75%. The state keeps 2 out of every 3 euros.

This does not mean that every tax is unjust or that the state should not finance common services. It means something more specific: the promise of prosperity weakens when nominal improvements disappear along the way. A pay raise may look good on the gross payroll, but if it coincides with inflation, high contributions, greater tax pressure, and soaring housing costs, the final feeling is different: “I earn more, but I do not live better.”

6. Housing

Housing is probably the great destroyer of perceived progress. The Bank of Spain noted in its 2024 Annual Report that access to housing has deteriorated, especially among young people and in areas with greater economic activity.

• At the end of 2024, buying an average home required around 7.2 years of gross income from a median household.
• For many renting households, the leap to ownership is directly unfeasible: they lack the initial savings, or the mortgage payment would exceed the recommended threshold of 35% of net income.

7. An increasingly unviable adult life

Here the paradox becomes almost cruel: the accessory gets cheaper; the essential gets more expensive.

• We have better phones, cheaper travel, infinite music, free information, and extraordinary digital tools.
• But the pillars of adult life — home, family, stability, savings, a life project — have become more difficult.

John Maynard Keynes imagined in 1930 that technical progress would lead us toward fifteen-hour workweeks. He was partly right: productivity could free up time. But perhaps he underestimated something deeply human:

• that well-being does not depend only on producing more,
• but on how power is distributed,
• which costs absorb income, and
• what kind of life we are able to build with the freedom obtained.

Productivity does not automatically guarantee a full life. It can free up time, but it can also concentrate benefits. It can make goods cheaper, but make positions more expensive: well-located housing, good education, a stable career, a sustainable family. It can eliminate hard jobs, but create anxiety, constant comparison, and job fragility.

8. In conclusion

That is why public debate is mistaken when it reduces everything to “working less” or “raising wages.” Both things can be good.

• But without real productivity, they are desires financed on credit.
• And without a reasonable distribution of gains, productivity becomes a brilliant statistic that never reaches the kitchen table.

The answer cannot be only collective or only individual. We need better institutions, more competition, fewer obstacles to business growth, more abundant housing, useful education, and a tax system that does not systematically punish work.

But we also need a “less comfortable personal ethic”: to train ourselves, adapt, create value, choose better, accept costs, and stop expecting adult life to be a promise without an invoice.

Progress has not disappeared. It is poorly distributed, poorly measured, and often poorly understood. We live with more possibilities than ever, but also with more individual responsibility to turn those possibilities into a solid life.

The question of the coming years will not only be how much we work. It will be what value we create, who captures it, and how much of that value truly becomes freedom, stability, and meaning.

Because a society can become more and more productive and still produce more frustrated citizens. That is the paradox. And understanding it is the first step toward not remaining trapped in it.