The social gap widens
Selective social policies for the worst off in society need to be implemented, in line with the recommendations of the OECD
Last week, a report by the International Monetary Fund (IMF) warned that Spain is the European country where social inequality is growing the most. And a new study by the Organization for Economic Cooperation and Development (OECD) insists on the same idea: Spain is the country where the impact of the crisis has been shared out most unequally. While the top 10 percent of income earners have barely felt the slump, the lowest 10 percent have experienced a 14-percent annual drop in their income.
The OECD report focuses on the period between 2007 and 2010, and does not take into account the effects of the second recession, which was triggered by the debt crisis. To these figures, we must add the effects of cutbacks to social spending, which intensified beginning in 2011, the rise in indirect taxes and the introduction of pharmaceutical co-payment, all of which has weighed heaviest on the lowest earners.
Poor Italians have seen their earnings reduced by four percent, compared with 14 percent in Spain
Spain and Italy are the two countries where the crisis has hit society most unevenly. But while the wealthiest Italians have experienced similar income reductions as their Spanish counterparts, poor Italians have seen their earnings reduced by four percent, compared with 14 percent in Spain. Even though the crisis is felt in the same measure, Spain has additional factors that aggravate the social consequences. The higher unemployment rate is the main factor, but not the only one. In a country with a high level of long-term unemployment, the inadequacy of social benefits doubtless contributes to intensifying the effects.
The picture that emerges from these reports should trigger an urgent reappraisal of the model of society that the crisis is leaving behind. Emerging from the slump is important, but it is equally important to preserve some standards of social cohesion that will guarantee social progress and equal opportunities. Many experts are warning that in the long run, inequality undermines a country’s possibilities for economic development. When certain levels are reached, the social gap becomes one of the biggest hurdles to economic recovery itself. This could be Spain’s case.
It is therefore imperative, as the OECD recommends, to implement selective social policies and earmark specific resources to rescue the less well-off so that the social gap will not keep growing at alarming rates.