Income inequality up in Spain despite recent economic growth

“In Spain, despite the prolonged period of strong job creation, stimulated by the 2012 labor reform, persistently high levels of long-term unemployment, falling real wages and persisting labor market segmentation translated into a sharp fall of labor incomes, especially at the bottom,” reads the report, which was released on Thursday.

Spain also has the highest rate of poor workers after Turkey and Chile.

Higher-income households benefited more from the recovery than those with middle and lower incomes

“Higher-income households benefited more from the recovery than those with middle and lower incomes,” states the study. “The fruits of the economic recovery have not been evenly shared.”

In Spain, inequality grew in 2014 even though the economy was growing at a rate of 1.4%. The reports finds that the average Gini coefficient of disposable household income – “a standard measure of inequality that takes the value of 0 when everybody has the same income and 1 when one person has all the income” – reached 0.346. In 2007 that figure was 0.324 while in 2012 it was 0.335, according to the OECD.

In 2014, the bottom 10% of workers in Spain earned just 2% of all income in the country while the top 10% earned 24.7%.

Fiscal policy and social transfers are two of the top instruments to fight inequality. The OECD report analyzed redistribution of wealth through subsidies and taxes, and found that in Spain, redistribution grew at the beginning of the crisis, but stalled beginning in 2010.

English version by Susana Urra.