Poverty and inequality were gradually corrected in Spain after the devastating effects of the Great Recession that began in 2008. But the arrival of the coronavirus pandemic and the economic impact it had due to the restrictions put in place has resulted in severe setback for this advance. In 2020, 7% of the population were affected by severe poverty or material deprivation, around 3.3 million people. That comes from the survey published on Thursday on the living conditions of the National Statistics Institute (INE).
The value is well above the 4.7% in 2019 and slightly below the 7.1% in 2014, the worst moment of the financial crisis. Public mechanisms such as the government’s ERTE Vacation Program and Family Aid have provided a significant buffer and prevent those numbers from getting any worse in the face of the drastic paralysis of activity.
In contrast to other data appearing in the living conditions survey, which is based on income figures from 2019, the indicator of severe material deprivation is based on a survey. According to the INE survey, which collected data in the fourth quarter of 2020 reflecting the situation at the end of the first year of the pandemic, at that time 3.3 million people in Spain were suffering from a serious shortage of essential goods.
The regions where respondents said they had the greatest difficulty reaching the end of the month in 2020 were the Canary Islands, Andalusia and Extremadura
This is understood as a lack of up to four necessities from a list of nine, including: serious difficulty reaching the end of the month with enough money (10%, three points more than last year); an inability to cope with unexpected expenses (35.4%, almost two points more); Payment delays at the main residence or in installment payments (13.5%, twice as much as in 2019); the inability to take a week’s vacation a year (34.4%, one point more); an inability to maintain an adequate temperature in the home (10.9% versus 7.6% in 2019); the inability to afford a meal of meat or fish every other day (5.4% versus 3.8%); the inability to afford a car, phone, television, or washing machine.
The regions where respondents said they had the greatest difficulties reaching the end of the month in 2020 were the Canary Islands (15.6% of respondents), Andalusia (14.8%) and Extremadura (12.7%) . The regions with the lowest percentages were Aragon (5.5%), the Basque Country (5.6%) and Navarre (5.9%).
The data reflects what was seen in what was known as the “hunger lines” during the pandemic, when many Spanish citizens were forced to resort to alms to eat. The figures reflect a precarious household situation but do not provide enough information to indicate the level of poverty, the most extreme form of poverty.
Regarding the pandemic’s impact on inequality, the numbers released on Thursday refer to 2019 and, as such, do not reflect any changes brought about by the pandemic. So far there are only some preliminary studies by the Bank of Spain that confirm a sharp increase. According to these numbers, during the first wave of the coronavirus pandemic, 10% of top earners earned five times what the poorest 10% made to 18 times. When the recovery started in the third quarter of last year, the number dropped eight-fold – but still a very stark contrast.
The inequality can be seen from other INE data. The contrast is great: while every tenth Spanish household had difficulties reaching the end of the month, in 2020 19.6% of households stated that they could maintain their standard of living for more than 12 months with their savings alone.
Another indicator is the risk of poverty or social exclusion, the so-called AROPE rate, which was developed by the European Commission. According to 2019 data, 26.4% of Spanish citizens were at risk of poverty, a figure that surpassed the 25.3% found in the previous survey. Does that mean that one in four is poor? Not exactly.
This statistic is based on people whose disposable income is less than 60% of the national median and has been adjusted according to the composition of their household (in 2019 this value was â¬ 9,626 for one-person households and â¬ 20,215 for families with two adults and two children). In 2018, 20.7% were below this threshold. And in 2019 it was 21%, although this year a significant increase in the minimum wage was decided. In addition, families in severe poverty need to be included – 7% based on 2020 data, as well as those whose members only work a few hours, which was 9.9% in 2019 compared to 10.8% the previous year. By combining these three groups, the population at risk of poverty rises to 26.4% of the total population. In reality, this is more an indicator of inequality than poverty itself, which means that Spain is facing the challenge of correcting this income inequality.
The INE notes that the risk of poverty is higher in the population with lower academic qualifications and in families with an adult with dependent children. According to the data, nearly 50% of people living in a household with an adult and children are at risk of poverty or social exclusion.
Unemployment is the main source of risk of exclusion. As expected, the employed have a much lower risk of poverty than the unemployed: 15% versus 54.7%. The pensioners, on the other hand, at 16.7%, are exposed to a similar risk of poverty as the employed.
English version of Simon Hunter.