The ILO figures at 64,500 million euros a year the loss in the income of workers in Spain since 2009



Workers’ incomes lose weight on wealth worldwide and Spain is one of the countries that stands out the most. The International Labor Organization (ILO) has put on Monday the focus on the “huge” fall in labor income in Spain, in favor of capital, compared to the Gross Domestic Product: they have gone from assuming 66.6% in 2009 to 61.2% in 2017. “It means about 64,500 million euros that annually instead of being in the hands of the workers are no longer,” said Joaquín Nieto, director of the International Labor Organization for Spain.

Nieto has been in charge of presenting in Spain the latest annual report of the ILO of Social and employment perspectives in the world, together with Roger Gomis, economist in the Organization of Production and Data Analysis of the organization and one of the authors of the study.

One of the novelties of the edition of the ILO report for this 2020, and where Spain is mentioned, is the study of the loss of participation of labor income on wealth. With a methodology developed by the ILO, which includes not only the salaries of the employees but also the income earned by the self-employed, the study indicates that “the proportion of labor income – as opposed to the proportion of national income that goes to stop the holders of capital – decreased worldwide from 54% in 2004 to 51% in 2017. “

In 2004, the data in Spain was 63.4%. “In Spain, the fall has been much greater than that observed worldwide,” said Joaquín Nieto, who has emphasized the effect of the economic crisis. “Since 2009 there are five points less, it is a huge amount,” said the head of the ILO in Spain. In euros, it is equivalent to a decrease for workers’ incomes of “64,500 million euros per year”. “That represents a huge loss from the point of view of each worker: we are talking about 3,200 euros a year per worker.”

Nieto has blamed this decline on the economic crisis and the measures that were implemented to overcome it. “In the end, all the austerity policies of the crisis and the way it has been tackled have resulted in that loss.” The ILO emphasizes that, unlike the EU average, Spain has not yet exceeded the employment level of 2007. There are not so many workers and their salaries have been devalued in these years, with more precarious employment, which It translates in total into a lower weight of labor income over national GDP.

The ILO also notes that in high-income countries the decrease in the income of self-employed workers “is a key factor in the aggregate decrease” and that “this finding is consistent with a scenario in which new forms of work are eroding in purchasing power of self-employed workers “.

Beyond the number of unemployed: underemployment

In global terms, the report also focuses on the novelty of underemployment or the “underutilization of the workforce.” The concept includes people listed in the official unemployment data, as well as those with jobs who would like to work longer hours and those who are interested in working but are not looking for a job because they are discouraged.

In total, about 470 million people are in this situation worldwide, according to the ILO, with an interest in working but without the labor market offering them a job or the hours of work they demand. The number of underemployed is much higher than 188 million unemployed, but “they give us a much more realistic picture of the employment situation worldwide,” said Nieto.

The data for Spain is 5.4 million underemployed people: 3.3 million unemployed, to which are added 1.2 million people who have work but want to work more hours and 900,000 more who do not have a job and want one, although they do not meet the conditions to be considered stopped. “As a consequence, the comprehensive measure of total underutilization of the labor force was 23%, substantially higher than the conventional unemployment rate” (14%), the organization points out.

For young people, unemployment data are much more alarming: they reach half, with an underemployment rate of 48%. “Only one in two people aged 15 to 24 who were interested in working had a job or enough hours of work,” the ILO warns.

The international organization recommends seeking solutions to underemployment through policy changes. “The report analyzes that there is not much room in monetary policies,” Nieto said, but “there is more room in fiscal policies” to stimulate certain sectors with high added value. The ILO highlights four globally, “with special importance for Spain”: the digital sector, the energy transition (“green jobs”), training and care. “They are very important sources of work and should be paid attention,” Nieto has recommended.

Returning to the world stage, the international organization has stressed that in this context of underemployment and poor working conditions of many workers, there are still many people living in poverty despite working. In total, more than 630 million people in the world living on less than $ 3.2 a day. One in five people in the world’s active population.

Although the figure is decreasing in global terms, the ILO warns that the number of poor workers will increase in the coming years in low-income countries (193.2 million workers in 2019 to 210 million in 2024). Therefore, the entity recommends focusing especially in these countries if they want to achieve the UN poverty reduction targets by 2030.

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