Income inequality in Spain: a growing and underestimated problem

Clara Martínez-Toledano, Facundo Alvaredo and Miguel Artola, Paris School of Economics
Adaptation: Sergio Torrejón Pérez, social researcher

Income inequality in Spain is greater than indicated in previous analyses. Furthermore, it has not ceased to grow since before the outbreak of the financial crisis. This is due to the fact that the upper class – above all the richest elite – has gradually obtained, since then, a higher proportion of total income, while the income share of the lower class has gradually decreased. The inequality of our country is higher than in France and lower than in the USA.
Key points
  • 1
       The proportion of income in the hands of the upper class has increased, from accounting for 35.9% of del total in 2006 to 39.9% in 2015. In contrast, the opposite has happened to the lower class. This explains the increase in inequality that has taken place recently.
  • 2
       The relative income of the upper class has improved because the income share of the richest 1% grew between 2006 – when it stood at 11.6% - and 2015 – when it stood at 15.5%. In other words, inequality has grown because a very small minority is accumulating more income.
  • 3
       The richest 1% has gradually accumulated a higher proportion of the total income generated in Spain by both labour and – especially – by capital. In fact, Spain is the country – in comparison with France and the USA , in which the income share of the richest 1% has grown most.
  • 4
       The upper classes of Spain accumulate an income share greater than that of their peers in France and smaller than that of their peers in the USA. In other words, inequality in Spain is higher than in France and lower than in the USA.
The income share of the lower class falls as that of the upper class increases.
The income share of the lower class falls as that of the upper class increases.

The income share of the upper class – magenta line – has increased since 2006. With the same clarity it can be observed, in the same period, that the income share of the lower class – blue line – has decreased. This symmetrical drawing expresses, graphically, how inequality has increased in recent years. It has increased so greatly that, since 2014, the richest 1% of the population has obtained more income than the poorest 50%. This imbalance, as well as the recent evolution of the phenomenon, highlight what constitute important political and economic challenges.

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