March 5, 2021

Working poverty has increased by 16% in Spain in the last decade

Spain has suffered the seventh highest increase in working poverty in the European Union between 2010 and 2019. This is clear from the annual report of the European Trade Union Confederation, Benchmarking Working Europe, which is published this Thursday. Analysis of data from Eurostat, the EU statistical body, reveals that the percentage of workers at risk of poverty increased in 16 member states between 2010 and 2019, before the impact of the pandemic, despite the fact that the economy improved during that period. Thus, Hungary, the United Kingdom, Estonia, Italy, Luxembourg, Germany and Spain have suffered the largest increases, with an increase in the rate of workers at risk of poverty between 58% and 16%.

Thus, the average increase in the working poor across the EU has been 12%, which means that around one in ten European workers – 9.4% – was below the risk-of-poverty threshold of Eurostat at the end of 2019, before the pandemic: 60% of the national average income.

Young people, migrant workers and those on temporary contracts are among the most affected, according to the study, although there has been an increase in poverty in all categories of workers, including those with full-time and permanent contracts.

The report by the European Trade Union Confederation also shows that only four Member States have regulated minimum wages above the recommended thresholds. The European Commission published a proposal for a directive on minimum wages in October, which leaves the last word to each government, although it considers that the criterion should be to set an SMI equivalent to 60% of the median wage – the most common. In the case of Spain, it would be to go from 950 to 979 euros per month in 14 payments.

The Deputy Secretary General of the European Trade Union Confederation, Esther Lynch, says: “It is a scandal that more working people are living in poverty now than at the height of the financial crisis even though the economy is growing. It is clear that action is necessary at the EU level. The EU must also ensure that minimum wages, where they exist, can no longer be set at a level that leaves workers and their families living in poverty, thus nullifying the whole meaning of the minimum wage. The European Commission has recognized that rising worker poverty is bad for society and the economy, but the measures they have proposed so far will do little to reverse this trend. ”

Indeed, the European Commission presented a directive at the end of October to “ensure that EU workers are protected by adequate minimum wages that allow a decent life wherever they work.” According to the Community Executive, “when set at adequate levels, minimum wages not only have a positive social impact, but also generate broader economic benefits, since they reduce wage inequality, help to sustain domestic demand and strengthen incentives to work. An adequate minimum wage can also help reduce the gender pay gap, as more women than men earn a minimum wage. ”

Brussels acknowledges that the current crisis “has particularly affected sectors with a higher proportion of low-wage workers, such as cleaning, retail, health and residential care. Ensuring a decent life for workers and reducing their poverty does not it is only important during the crisis, it is essential for a sustainable and inclusive economic recovery. ”

In recent decades, low wages have not remained at the same level as other wages, and worker poverty has increased, according to the European Commission, with data prior to the pandemic: “The poverty of workers increased from 8, 3% in 2007 to 9.4% in 2018 in the EU.Wage inequality has also increased in large part due to increasing polarization in the labor market (declining employment in medium-paid or moderately skilled occupations) and a simultaneous increase of low- and high-paying occupations, along with the decline in collective bargaining. ”

The European Commission also set itself the “objective” of “promoting collective bargaining of wages in all Member States”. Why? “Because countries with high collective bargaining coverage tend to have a lower proportion of workers with low wages, lower wage inequality and higher minimum wages.” Precisely one of the most relevant aspects of Mariano Rajoy’s labor reform of 2011, often praised in Brussels and whose repeal is contained in the government agreement between PSOE and UP, is the bankruptcy of collective bargaining. Thus, at present, they are the data of the European Commission itself, Spain is below the threshold of 70% of coverage by collective bargaining.

“Member States that are below 70%”, explain sources from the European Commission, “will be invited to make an additional effort and draw up an action plan to promote collective bargaining. 70% is a minimum of what it should be the coverage of collective bargaining. But, of course, it would be much better if it were superior. Collective bargaining is important because workers are protected with wages that are established in collective agreements, and they tend to have higher wages. ”

Community sources explain that “average collective bargaining in the EU has decreased from more than 80% in 1985 to less than 60% in 2015, and this is what guarantees a good level of wages and also minimum wages. This decrease is matter of concern”.


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