The great looting

The composition of unemployment in Spain multiplies poverty and inequality. The poor are each
more poor because they have lost well-being and the sectors most affected by the crisis are the
more vulnerable to unemployment

Joaquín Estefanía
THE COUNTRY - Opinion - 09-05-2011

No matter how many books are sold and how many television programs support the
positive thinking (actually, magical thinking), it is very difficult to observe the crisis
economic as an overriding option. The 'creative destruction' will be for those who
survive, not for the millions of citizens who are left behind. It's told by the
journalist Barbara Ehrenreich, in her excellent book Smile or Die: there are people "who had been
fired from work and heading downhill and out of control towards poverty, which was said to be
that she should see her situation as an opportunity (...) The person who thought positively did not
she would only feel better while looking for a job, but for her, that process would end sooner and
more happily.
This description is contrary to reality. Data is beginning to appear in Spain that allows
to know the first deep marks of the Great Recession in households, in terms of
poverty and income distribution. This first assessment is not precisely favorable for a
a good part of Spanish citizens: unlike other moments of crisis in the 30s
After long years of Spanish democracy, there is now more inequality because there are more poor people.
poor because they are losing well-being; the most affected sectors are the most vulnerable to
unemployment (and not pensioners and older people), given that the composition of the market of
work is key to interpreting what is happening. And, worse still, public policies
they do not adjust to the new situation or to the risks that it implies.

There are at least two works that have analyzed this social recomposition in Spain, in light of
of several interconnected phenomena: the exponential and compulsive influx of immigrants into the
last decade, attracted by job opportunities and living conditions; their
limited expectations due to the bursting of the real estate bubble, which had been a substantial part
of the growth model; and definitely cut short -the expectations of immigrants and of
a good part of the native active population - due to the great economic crisis in which
we are installed. These two reports from the Alternativas Foundation are the Report on the
Democracy in Spain (IDE-2011), coming soon, in which the researchers of
Professor Ruiz-Huerta's team has delved into these issues, and the text titled Poverty and
material deprivation in Spain during the period 2004-2008: from economic boom to the beginning of the
recession, by Professor Rosa Martínez.

To understand what happened in Spain during the three long decades of democracy, these can be
divided into five stages. The first phase is represented by the long period of stagnation
from the beginning of the oil crisis to the mid-eighties. Basically the
period in which UCD governed and somewhat PSOE. Then there was no worsening of the
inequality and poverty, which even improved slightly. The intense destruction of
employment and the transition from unemployment rates below 5% to records above 20% is not
They translated into inequality and poverty because wages grew during a period.
highly inflationary, and because some of the components of the State developed
well-being under the protection of the democratic process.

The second phase lasts from the mid-eighties to the first third of the nineties.
It corresponds to the governments of Felipe González. In a context where the majority of the
OECD countries, subordinated to the conservative revolution - especially the United States
and the United Kingdom - record spectacular increases in inequality, this is reduced in Spain.
What are the causes? The recovery of employment, even if the rate could not be significantly reduced.
of unemployment and a good part of the jobs will be sustained by the increase in the
temporality; and the increase in redistributive spending with the implementation of new
social benefits and the strengthening of programs that already existed.

The third phase is the recession triennium 1992-1994, also with the socialists in power. Brief
but an intense process of stagnation, with negative GDP growth rates. Unemployment
increased by 10 points (from 15% to 25%), and there was a strong growth in the indicators of
poverty and inequality, breaking the trend of previous decades.

The fourth phase runs from 1995 to the onset of the current crisis in the summer of 2007. End of the
Socialist executives, the two terms of Aznar and the early years of Zapatero. The
The prolonged growth phase does not offset the increases in poverty and inequality.
previous three years: a large number of the jobs created are low-wage and in
good temporary measures; there is a very moderate increase in spending during the first years
social, with a certain distance from the average levels of the EU; loss of the
distributive capacity of income taxation and reduction of the redistributive effect of
monetary social benefits due to the increase in the number of beneficiaries and to the
discrepancy of amounts in relation to average income levels, etc.

The current phase of recession and stagnation has its own negative peculiarities. The most
An important one of them is the rapid growth of the unemployment rate among the main supporters.
of the households (to the former 'head of family') that rises to almost a million people. In
previous crises, the negative effects of youth and spouse unemployment are compensated with
the use of the main supporters and the unemployment protection system, which prevented a
intense increase in both inequality and poverty as well as social tensions. In this
In the context of crisis, the unemployment rate of the main supporters has increased more and at a faster pace.
than at any other time in history. Equally revealing in this sociological change.
it is the number of households in which all assets are unemployed (also
more than a million). Finally, it is significant to observe the increase in households that do not receive
neither income from work, nor from the pension system, nor unemployment benefits (due to being their
long-term unemployed members); it is a population whose only resource is access to the
autonomous minimum income systems, given the recent elimination of the temporary program of
unemployment benefit and integration.

Conclusion: the volume of unemployment and its composition are the most tangible manifestation of
deterioration of indicators on the state of income distribution in relation to
reasonable equity objectives. Although the crisis has affected everyone, the capacity for defense and
Recovery is very different depending on the position each person occupies in the income distribution.
The risk of poverty among the unemployed has increased, although that same index has improved.
among the pensioners.

Two final notes: despite the efforts made through public policies, the
insufficient unemployment protection measures, the lack of coordination of incomes
autonomous minimums and the financial restrictions of public administrations raise
serious questions about the danger of social instability. Finally, analysts warn
against a mirage: economic recovery, in light of experience, does not imply a
immediate improvement of distributive variables, given the segmentation of the labor market and the
precariousness of many of the jobs created.