Back Divide between rich and poor

Report

Divide between rich and poor

Jordi Sevilla, Belén Santa Cruz and Diana Ortega, economists;

Key points
  • 1
       Spain has become an increasingly more unequal country, with ever greater numbers of rich people but more poor people too. This is creating dynamics of polarisation that are leading to a dual society that is advancing at two speeds. A multidimensional divide that, based on the different indicators analysed, we can affirm exists, is broad and has different social, economic and even political implications, thus does not simply obey a mere lack of income.
  • 2
       Inequality in Spain is high, exceeding the European average and, furthermore, it has a structural component. High levels of inequality of income and of wealth, as well as serious problems in terms of equal opportunities, with a social elevator that does not work as it should, are giving rise to an intergenerational transmission of poverty or, to put it another way, to poverty becoming hereditary.
  • 3
       The snapshot of poverty and social exclusion in Spain evidences a strong increase in people who are in this situation, both following the financial crisis of 2008 and following the covid-19 epidemic. Some 25.5% of the Spanish population is in this situation.
  • 4
       Furthermore, covid-19 has not affected the whole population in the same way, it has had a greater impact on more disadvantaged areas and vulnerable groups. A recent Oxfam report estimates a 22.9% increase in poverty in the last year, leading to the highest figures in the last decade.
  • 5
       The Spanish system presents inequality in the distribution of income and wealth (fundamentally due to the labour market and an economic fabric with low productivity and a small business size). Furthermore, this inequality is not sufficiently reduced, above all if we compare it with countries from the European environment, after the action of a model of redistribution and of social protection that is not capable of providing a solution to current problems and that leaves numerous social groups in a situation of exclusion. The capacity to reduce poverty and inequality is lower than in other Eurozone countries and, moreover, the system does not always target those who need it most.
  • 6
       Economic growth alone will not be sufficient to close this divide; therefore, it will be necessary to review and update the existing mechanisms and incorporate other new ones. From debate with twelve experts on the subject, specific proposals for a solution can be inferred, such as a reduction in fiscal spending, shifting the burden of taxation from working income towards capital income, a minimum living wage, an increase in benefits aimed at the lowest deciles of the distribution and the improvement of child benefits, a modern and innovative industrial policy with an increase in investment in RDI up to 3% of GDP, a new housing rental law and a greater pool of social housing, universal infant education or an increase in spending on dependency, among others.
  • 7
       This divide is converting us into a more vulnerable society with regard to tackling the less positive phases of the economic cycle in the immediate future but, also, more vulnerable with views to tackling the great challenges of the future in the medium and long term. Closing this divide in the present means investing in the future of society.
Key figures
Key figures

Classification

Tags

Subject areas

Contents of the collection

The divide between the rural and the urban world

Related content

Report

Social welfare systems and inequality in Europe

Spain’s social protection system is less redistributive than those of other EU countries. What reforms could help reduce economic inequality in Spain?

Article

Private tuition and economic inequality in Spain

33% of pupils with lower economic capacity attend private tuition, in contrast with 57% of pupils with a higher profile. Differentials in participation in extracurricular activities in relation to economic capacity are greater in secondary school.

Article

Inequalities in covid-19 inequalities research: Who had the capacity to respond?

Did inequality exist in the research into the inequalities of covid-19? We analyse it in this comparative study focusing on research production, distribution and collaborations between countries.

Report

Capital income and income inequality in Spain, 1980-2020

Why does Spain present income inequality levels higher than the European average? Differences in income between age groups and the concentration of capital among the richest groups are some of the causes.

Report

Moving in and out of in-work poverty in Spain

Having a job is no longer sufficient for escaping poverty. Many households, especially with children, are experiencing in-work poverty associated with low wages or periods of inactivity.

You may also find interesting

The divide between the rural and the urban world

Report

The divide between the rural and the urban world


Social Inclusion

The divide between the rural and urban worlds has important consequences in social, economic, environmental and even political terms. Finding a balance should be a priority.