Spain’s long economic crisis has been particularly tough on young people, while senior citizens have managed to pull through more or less unscathed thanks to their guaranteed pensions. That’s according to the latest Bank of Spain Survey of Household Finances, which was released on Tuesday.
The households of young people saw their incomes plummet 22.5% from 2011 to 2014, while the income of retiree households climbed 11.3% in the same period, according to the central bank’s triennial study.
This income growth among seniors was partly linked to a real increase in income but was also linked to the fact that an earlier group of retirees was being replaced by a newer group of people aged 64 years and over with higher pensions because they paid more into the system while they were working than their predecessors.
Young people were the main victims of the destruction of jobs in the three years covered by the survey
By contrast, young people in Spain had to combat high levels of youth unemployment and accept entry-level wages lower than those enjoyed by people who joined the job market before they did.
In fact, from 2011 to 2014 the only group in Spain that saw its average income rise was that comprising households of people aged 64 years and over, according to the Bank of Spain study, which is based on a weighted survey of 6,000 homes around the country.
These figures show that young people were the main victims of the destruction of jobs in the three years covered by the survey. They had the highest proportion of temporary contracts and were much easier and cheaper to fire.
The retirement benefits of pensioners were, on the other hand, preserved during the crisis with different governments all arguing that older people had less room to maneuver if their income fluctuated, and that this group was also supporting other family members.
In terms of wealth, both Spain’s youngest and poorest households were hardest hit
In terms of wealth – that is, property, financial or business assets – both Spain’s youngest and poorest households were hardest hit, registering the greatest falls. In fact, while there was a generalized net fall in wealth from 2011 to 2014, the only group that managed to maintain its wealth level was households of people aged 65 to 74.
People aged 75 and over did not see their wealth increase because they were forced to draw on savings to maintain their standard of living.
One other group did not see their wealth decrease: people who inherited assets. The reason for this is that these people invested more money in shares, and from 2011 to 2014, Spain’s blue-chip Ibex 35 gained 20% in value.
English version by George Mills.