This time it has not been a non-governmental organization such as Cáritas, Oxfam Intermón, the Red Cross or Save the Children, nor a study by experts that has raised the alarm about the impoverishment of the most vulnerable. It has been the Bank of Spain that has pointed out the deterioration of the living conditions of the poorest segments of society.
The data is compelling. In 2022, 9% of households (1.6 million families) could not cover essential expenses with their total income due to the “observed growth in inflation and interest rates”. The situation has worsened compared to 2020, when households with difficulties represented 7%. The penalties are more severe for the 20% of the population with the lowest income, in which households that could not cover their essential expenses represented 17% of the total in 2022, compared to 14.6% two years earlier.
The most disturbing thing about this social x-ray is that the deterioration has occurred despite the extraordinary measures adopted by the coalition government such as the creation of the Minimum Vital Income, the sharp increase in pensions and the minimum wage. The Bank of Spain study acknowledges that it has not taken into account these or other measures such as the Code of Good Practices, applied in recent quarters, which in its opinion would have contributed to cushioning some of the effects indicated. It is significant that the impact that aid has had on those most in need has not been quantified. It is not necessary to speculate much to imagine what can happen with a future Government that eliminates or reduces this support.
The ravages of high inflation have been greater than anticipated everywhere. The annual economic report of the Bank for International Settlements acknowledges that “the staggering rise in inflation has substantially eroded the purchasing power of wages.”
Despite the successful support measures for the most vulnerable, they have been insufficient to neutralize the unstoppable inertia of a model of capitalism that has become a system that generates inequalities. A system that has normalized the existence of workers at risk of poverty, which in the EU reaches 12%; in Spain, 13%, but that had exceeded 20% in 2019. A reality that explains how the remuneration of employees reduced its weight in the total production of the economy to 46.9% in 2022, compared to 49.7% in 2020.
It is necessary to reconsider a more equitable distribution of the income generated between salaries and corporate benefits. The increase in business margins, of 25% in the energy sector, is a clear indicator of the difficulties of correcting this voracious model of capitalism.
One way to reduce inertia towards inequality is to ensure that the production of certain essential goods, such as housing, are heavily controlled by public administrations. It is not a utopia. Austria and the Netherlands have achieved excellent results.
Follow all the information of Economy and Business in Facebook and Twitteror in our weekly newsletter
Five Days agenda
The most important economic appointments of the day, with the keys and the context to understand their scope.
RECEIVE IT IN YOUR MAIL
Subscribe to continue reading
Read without limits