The crisis made Spain a country with greater inequality and 20% poorer
According to the report published by the BBVA Foundation and the Valencian Institute of Economic Research , the disposable income of Spanish households fell by 20% between 2007 and 2014. The study confirms that this fall is distributed very unevenly between households, with a large part of its cost on middle and low income strata. This places Spain as one of the countries with the most inequality after the crisis. IVIEAmong the main factors behind this decline is the plummeting income from work, which accounts for around 75% of household disposable income. 80% of the fall in labor income is explained by the very high unemployment, especially long-term unemployment that no longer has benefits, as well as the proliferation of temporary and part-time contracts.As data that reflects the increase in part-time contracts and its impact on the fall in income, the study states that, " while part-time employees grew by half a million during the crisis, the total number of employees fell by 3 millions " More factors In Singapore Phone Number List national accounting, if we add monetary social benefits and direct taxes to labor income, we obtain the gross disposable income of households. If we add public benefits in kind to the latter, such as health and education, we finally obtain the adjusted household disposable income . In this equation, monetary social benefits have helped to alleviate to a certain extent the drop in labor income, according to the study. The former are made up of pensions, unemployment benefits, and other types of benefits. Thus, pensions have reduced inequality by 17.9% during the crisis, and to a lesser extent unemployment benefits.
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On the contrary, there is a "moderate" contribution of direct taxes in the redistribution of income, which reveals the weakness of the current tax system in supporting the welfare system. Regarding the effect of public benefits in kind to reduce income inequality, the study highlights that healthcare contributed 10% to this reduction thanks mainly to hospital spending, while education contributed 8%, basically due to spending on primary and secondary education. However, this contribution decreased year after year during the crisis, since social spending depends on the Autonomous Communities and they were greatly affected by the drop in income. In short, the report advocates the recovery of stable, quality employment to reduce inequalities and increase household disposable income.
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