Part of the complication if the enormous taxes and bureaucracy involved in companies hiring workers, it's a real pain for start-ups and smaller companies.
I will give you one concrete example: companies in Spain with more than 50 workers must carry out salary audits to avoid gender discrimination [1]. These and other perverse incentives keep many companies from growing, which in turn hurt the economy and reduces demand for workers, driving wages down.
It starts earlier than that: payroll tax in Spain is 36%.
If you're a micro-company, you can probably get away with paying each employee cash, or via B2B payments.
Once you reach any reasonable scale, you have to formalise those contracts.
This is a problem across the EU, apart from areas like the UK and Scandinavia which don't have payroll taxes (where interestingly tech seems to be flourishing).
I will give you one concrete example: companies in Spain with more than 50 workers must carry out salary audits to avoid gender discrimination [1]. These and other perverse incentives keep many companies from growing, which in turn hurt the economy and reduces demand for workers, driving wages down.
[1] https://spainsnews.com/companies-with-more-than-50-workers-m...