Experts with confused ideas

This week brought us three news stories that once again highlight the extent of confusion among experts who comment on our economic situation. Let's recall the headlines La Vanguardia dedicated to them:

-“The tourist tax has increased sixfold since 2019 and now exceeds 106 million [in Barcelona]” (Tuesday). Let's remember that when this tax was introduced in 2012, many “experts” predicted a terrible impact on the competitiveness of the tourism sector, and let's remember that when Barcelona City Council approved the current surcharge—which is responsible for a sixfold increase in revenue in the city—many “experts” also predicted that the survival of a critical sector was at risk. The truth is that tourists have continued to come to the city in ever-increasing numbers, far exceeding its capacity to accommodate them. One wonders how they have the courage to continue to speak out.

Nothing more convenient than continuing to raise the tourist tax and the minimum wage.

-“Employment breaks a new record with nearly 21.8 million members” (Wednesday). Let us recall that in September 2021, the day after the Spanish government and unions agreed to raise the minimum interprofessional wage (SMI) to 965 euros (!), the governor of the Bank of Spain warned us of the terrible impact such a measure would have on employment. He did so based on a study by that institution that suggested this impact could amount to 180,000 jobs (!). The truth is that the government has continued to raise the SMI to 1,184 euros, without this being able to stop a very rapid process of job creation, largely low-skilled and largely filled by immigrants, that is, directly affected by the SMI. One wonders why the Bank of Spain has not issued a correction.

-“The good performance of the economy reduces poverty by only 1%” (Thursday). Obviously, this is an absurd statement, because if poverty isn't reduced, it means the economy isn't doing well.

For more than two decades, the Spanish economy has been on a trajectory characterized by intense GDP growth fueled by the growth of low-productivity sectors and job creation for low-skilled immigrants, resulting in a freeze in productivity and GDP per capita, but also in rapidly rising real estate prices.

Let's be clear: this trajectory is anything but positive, and it will only become so when the number of tourists declines because the country becomes more expensive for them, and when we stop creating so many jobs because employers have to pay them more. To achieve this, there's nothing more convenient than continuing to raise the tourist tax and the minimum wage. At least until the economy stops doing as well as it is now and starts to do truly well.