June 5, 2020

in the lead in the EU and with households with children as the main affected



Poverty was there, but it was invisible to many. In a matter of days, due to the coronavirus pandemic, they have multiplied in the streets the long lines of citizens who need help eating. These rows are new, but not the problem that causes them. In Spain, one in five people lives below the poverty line and one in four is at risk of social exclusion.

Millions of people barely make ends meet and some don’t even. The fourth economy of the eurozone stands out among its European partners for its high numbers of poor people. “I have visited places that I suspect many Spaniards would not recognize as part of their country,” warned UN rapporteur Philip Alston a few months ago. The Government is going to approve this week one of the most ambitious measures against poverty that have been implemented in Spain at the state level: it will implement a national minimum income, minimum resources that the State considers necessary to live.

The right, and especially the extreme right, has turned against the measure, which they call “paguita”, but the level of poverty in Spain and the limited capacity of the country to reduce it compared to our European partners show that social coverage people with more financial difficulties is a pending issue. “Poverty is a political option,” said the UN rapporteur on rich countries.

The European Commission recalled just this week that Spain is the European country with the lowest child benefits in the EU and warned that this coronavirus crisis could increase poverty in the country, especially among families with children, whose social protection it is very limited. The same does not happen with the elderly, thanks to the mattress provided by the public pension system, more generous in many cases than that of other EU countries.

To avoid the increase in poverty, Brussels has recommended to Spain to improve the coverage of minimum incomes and aid to families, something to which the Minimum Vital Income will contribute, more generous for households with dependent children and single-parent families.

With regard to the forthcoming launch of this state minimum income, we review some outstanding data on the poverty situation in the country before its launch.

1) Sixth in poverty among the 28 EU countries

Spain is the sixth country of the 28 that make up the European Union with the highest poverty rate, with one in five people in this situation, 21.5% of the total, according to the latest available data, from the Survey of Conditions of INE life of 2018.

There are various ways to measure poverty. The most widespread is the relative poverty rate, which measures it in relation to the income of society as a whole. People are at risk of poverty by living on an income below 60% of median income. In Spain, it means having an income of less than 739 euros per month in a home made up of one person or 1,552 euros per month in a home made up of two adults and two children.

What happens in countries around us? Relative poverty reaches 17.3% of citizens of Portugal, 13.4% of those in France and 20.3% of Italy, for example. The lowest rates are found in the Czech Republic (9.6%), Finland (12%) and Slovakia (12.2%). The highest in Romania (23.5%), Latvia (23.3%) and Lithuania (22.9%).

Another common indicator to measure the most acute poverty is the severe poverty rate, which includes those with incomes below 40% of the median. In Spain, it means living on less than 493 euros a month in a home with only one person.

Again, Spain ranks as the sixth country with the highest rate of severe poverty in the EU, with 9.2% of its population in this situation, the same figure as in Bulgaria. In Portugal the figure is 6%, while in France it only reaches 2.5% of its population. Italy in this case surpasses Spain, with 9.4% of its citizens at risk of severe poverty.

2) More poverty than before the crisis

Another way to measure poverty in the EU is the AROPE indicator, which also observes the level of social exclusion. In addition to taking into account the monetary relative poverty rate, which only takes into account income, the AROPE indicator incorporates two more variables: low employment intensity and severe material deprivation, which takes into account factors such as not being able to afford to go Holidays at least one week a year, a meal of meat, chicken or fish at least every other day and keeping the house at an adequate temperature and not being able to face unforeseen expenses, among others.

Material deprivation levels in 2018

This map shows the% of the population in different indicators of material deprivation in each autonomous community. Click on the map filter to select the results of the different indicators

Source: INE

Spain is listed as the seventh country of the 28 community with the highest poverty rate and social exclusion, with a rate of 26.1%. More than one in four people. The EU average is 21.8%.

The country still faces a challenge overcome by the vast majority of our European partners: recovering at least the poverty levels of a decade ago, before the economic crisis that erupted with the bankruptcy of the financial giant Lehman Brothers.

After Italy, Spain ranks as the second state with the highest increase in people in this situation compared to 2008.

3) In the first positions in child and worker poverty

As highlighted by the European Commission to Spain this week, the country has especially alarming data on poverty among minors and in households with children. Above all, in single-parent families, those made up of a single adult with dependent children. The vast majority are headed by women, which is why they are also often referred to as “single-parent families”.

Spain’s child poverty rate is the second highest in the entire EU, with 26.8% of those under 18 at risk of relative poverty. Only Romania overtakes us, with 32%. If we were to attend the AROPE rate, one out of every three children in Spain is at risk of poverty and social exclusion, 29.5%. In this case, we are overtaken by other states besides Romania, which places us as the fifth country with the highest proportion of minors in poverty and exclusion from the EU.

As mentioned, single-parent families are another group especially affected by the scarcity of resources. About half of the total, 43%, live at risk of monetary poverty. Spain is the second country with the worst record, only behind Malta (48.6%).

The incidence of poverty among workers also places Spain at the top of the EU, with 13% of all employed people living at risk of monetary poverty. Specifically, the country is the third of the 28 Community with a higher figure, behind Romania (15%) and Luxembourg (13.5%). What happens in other countries closer to Spain? In Portugal the rate of poor workers is 9.7%, in France 7.1% and in Italy 12.3%.

Regarding these pockets of poverty, the minimum vital income will allocate more resources to families with dependent children and to those who are single parents. In relation to employment, which is clearly not always possible to avoid poverty, the state minimum income will not automatically decline when the beneficiary finds a job, but may supplement for a time the salary income that the beneficiary receives. This already happens in some reference regional incomes, such as the Basque one.

4) Existing social transfers almost do not reduce poverty

The right and voices such as the employers of CEOE entrepreneurs question that it is time to implement social spending as the minimum vital income. Remember that minimum incomes are already deployed at the autonomous level. In addition, there are also aids to families with very poor children, the so-called child benefit by Social Security.

However, the data from the statistical agency Eurostat show that the existing aid in Spain is not very effective in reducing poverty and places us among the EU countries with the least capacity to reduce it through social transfers (excluding pensions). Specifically, the State is less effective among minors and young people, with better results for the population over 65 years of age.

Why the aid that we have almost does not reduce poverty? There are several reasons. As the sociologist and former high commissioner for the fight against child poverty, Pau Marí-Klose, the aid per dependent child is hardly effective due to its very small amount – 28.41 euros per month or 49 euros in cases of severe poverty (and that after the great increase approved by the Sánchez Executive in 2019) – and its limited coverage. In other words, they are very small amounts of aid that reach a small number of people at risk of poverty.

The very limited extent of minimum incomes is also a problem in the vast majority of Autonomous Communities, which leaves more than 90% of people at risk of poverty in Spain without access to these grants for social integration, according to data from the Association of Directors and Managers of Social Services.

Only the minimum incomes in the Basque Country and Navarre reach more than half of the poor: 71.2% and 66.7%, respectively. In the Community of Madrid, where its president, Isabel Díaz Ayuso, denies the need for state aid, the regional minimum income only covers 10.5% of the population living below the poverty line.

Another reason behind the low poverty reduction in the Spanish welfare system is that social aid is not redistributive, it does not focus its efforts on those who have the least. In other words, state transfers as a whole benefit the population with more resources more than those most in need, as shown these 2018 OECD data.

5) Poverty is not the same in the Basque Country as in Extremadura

The average poverty data in Spain make great differences between the Autonomous Communities invisible. The situation is very different in the Basque Country than in Extremadura. They are the territories with the lowest and highest poverty rates: they affect 8.9% of the Basque population, while the figure rises to 37.6% of people from Extremadura. As seen on the map, as in many other matters, there is a clear difference between the poverty situation in the North and South of the country.

However, the latest report on social exclusion from the Foessa Foundation, a benchmark research on the subject, highlighted the perception of a new South-Mediterranean axis: “The southern axis extends into the Mediterranean, incorporating Catalonia and the Balearic Islands into the communities where social exclusion is highest”. Castilla-La Mancha, on the other hand, “an autonomous community traditionally aligned on the southern axis, is now closer to an intermediate situation,” said the researchers, who will analyze this matter in an independent study.

As happens between Autonomous Communities, the poverty data are not the same between provinces, nor between urban and rural areas. Sometimes not even a block away within a big city.

The official data on poverty and exclusion offered by the Living Conditions Survey do not allow these differences to be appreciated, but the INE published at the end of last year an experimental statistic with unpublished data on income and its distribution (that is, from 2016), which in reached a breakdown even at the census level, for blocks in big cities like Madrid.

The information in such detail allows locating the population with fewer resources. For example, almost all the blocks located in the neighborhood of ‘3,000 Homes’, in the city of Seville, are among the poorest 1% in Spain and Andalusia. Here, you can consult the map with the income data by income source, street by street.

6) 80% of the population in poverty is Spanish

Poverty is not what many think. It is not only the most absolute misery, but reaches about 10 million people in Spain. Ten million. The European Network for the Fight against Poverty and Social Exclusion (EAPN) exploded in a study how is the population living below the poverty line in the country. “There is an enormous ignorance of what the poor are like and that leaves a lot of open way to speculations that have many interests behind them,” warned the author of the study, Juan Carlos Llano.

The vast majority of people at risk of poverty are Spanish, 80.5%, and a third of adults face this situation despite working.

In addition, more than one in three (36.3%) over 15 years of age at risk of poverty in Spain have medium and high studies: specifically, 22.9% have a Bachelor and 13.4% have an education higher.

7) The poor are poorer: we get worse in the poverty gap

The EAPN also highlighted in his latest analysis of the state of poverty in Spain “the clear worsening of the living conditions of the poorest people” in the last decade, “mainly expressed in the increase in the poverty gap and the severe poverty rate, although both have decreased this past year.”

The poverty gap can be defined as the amount of money a poor person needs to stop being poor, that is, the difference between their income and the poverty line.

In the last available exercise (2018) this distance was reduced to 28.5%, a figure that is still three percentage points above that of 2008. “In absolute terms, if on average, a poor person was missing 2,148 euros to stop being so, in 2018 it is missing 2,529 euros, “stresses the EAPN study.

The organization also points out that the population with more extreme economic conditions, with incomes below 30% of median income, is now higher than it was a decade ago: in 2018 it reached some 2.6 million people, “740,000 more than in the year 2008”.

At this time, many voices warn that the coronavirus crisis can affect those with the least intensity more. The Madrid City Council has published a study about it, than shows clearly how lower-income households are the ones most affected by reduced incomes these days.

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