Covid-19: The coronavirus pandemic pushed poverty in Spain to its highest level since the Great Recession | Economy and business
Poverty and inequalities were gradually corrected in Spain after the devastating effects of the Great Recession which began in 2008. But the arrival of the coronavirus pandemic, and the economic effects it had due to the restrictions put in place , have meant a serious setback to this progress. Extreme poverty or material deprivation affected 7% of the population in 2020, or about 3.3 million people. This is what reveals the survey on living conditions published Thursday by the National Institute of Statistics (INE).
This figure is well above the 4.7% recorded in 2019 and slightly lower than the 7.1% observed in 2014, which was the worst moment of the financial crisis. Public mechanisms such as the government’s ERTE leave scheme and family support provided a significant buffer, preventing these numbers from getting even worse given the drastic paralysis of business.
Unlike other data that appears in the Living Conditions Survey, which is based on 2019 income figures, the severe material deprivation indicator is survey based. 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, 3.3 million people in Spain were then facing a serious lack of items needed.
The regions where respondents said they had the most difficulty getting to the end of the month in 2020 were the Canary Islands, Andalusia and Extremadura.
This is the absence of up to four necessities on a list of nine, including: serious difficulties in ending the month with enough money (10%, up three points from the previous year ); an inability to cope with unforeseen expenses (35.4%, almost two points higher); late payments on the main residence or on staggered plans (13.5%, which is double the figure for 2019); an inability to take one week’s vacation per year (34.4%, one point more); an inability to maintain an adequate temperature in the house (10.9%, compared to 7.6% in 2019); an inability to afford a meal with meat or fish every other day (5.4% vs. 3.8%); an inability to afford a car, telephone, television or washing machine.
The regions where respondents said they had the most difficulty 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 the so-called ‘hunger lines’ during the pandemic, when many Spanish citizens were forced to resort to handouts to eat. The figures reflect a precarious situation in households, but they do not provide enough information to indicate levels of deprivation, which is the most extreme form of poverty.
As for the impact of the pandemic on inequalities, the figures released on Thursday refer to 2019 and, as such, do not reflect any changes from the pandemic. To date, there has only been a few preliminary research conducted by the Bank of Spain that confirms a sharp rise. According to these figures, 10% of the best paid employees went from five times what the poorest 10% earn to 18 times during the first wave of the coronavirus pandemic. When the recovery seen in the third quarter of last year arrived, the figure fell to eightfold – still a stark contrast, though.
The inequality can be seen in other data provided by the INE. The contrast is huge: while one in 10 Spanish households struggled to finish the month, 19.6% of households said in 2020 that they could maintain the same standard of living for more than 12 months just with their savings. .
Another indicator is the risk of poverty or social exclusion, which is called AROPE rate designed by the European Commission. According to 2019 data, 26.4% of Spanish citizens were at risk of poverty, a figure that exceeded 25.3% in the previous survey. Does this mean that one in four people is poor? Not exactly.
This statistic is based on individuals whose disposable income is less than 60% of the national median, and adjusted according to the composition of their household (in 2019, this level was € 9,626 for single-person households and € 20,215 for families with two adults and two children). In 2018, 20.7% were below this threshold. And in 2019, that figure was 21%, despite a significant increase in the minimum wage approved that year. In addition, we must include families in a situation of great poverty – 7% on the basis of 2020 data, as well as those whose members work very few hours, which amounted to 9.9% in 2019 against 10, 8% the previous year. Combining these three groups, the population at risk of poverty amounts to 26.4% of the total. In reality, this is more of an indicator of inequality than of poverty itself, which means that Spain faces the challenge of correcting this income inequality.
The INE recalls that the risk of poverty is greater in the less educated population and in families made up of an adult with dependent children. Almost 50% of people living in households with an adult and children are at risk of poverty or social exclusion, according to data.
Unemployment is the main cause of the risk of exclusion. As might be expected, the working people have a much lower risk of poverty than the unemployed: 15% versus 54.7%, respectively. Retirees, for their part, are exposed to the same risk of poverty as employees, at 16.7%.
english version by Simon Hunter.