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‘Working poor’ abound in Spain despite economic recovery
MADRID, Nov 14, 2018 (BSS/AFP) – Spain may be the EU’s poster child for
economic recovery, but impressive growth rates have failed to make a dent in
the number of people struggling to make ends meet despite having jobs, the
“working poor”.
A combination of low wages and reliance on temporary contracts is keeping
millions of workers stuck below the poverty line — nearly one in six,
according to labour ministry figures.
The country has the European Union’s highest proportion of workers at risk
of poverty, 13.1 percent, after Greece and Romania, according to 2016
Eurostat figures.
Spain’s economy shrank during the financial crisis from 2009 to 2013 but
rebounded in 2014. Its rate of expansion has since outstripped much of the EU
with growth of more than 3 percent.
But the recovery has bypassed many workers like Elisabet, a 44-year-old
Madrid waitress who is employed on a three-month contract.
She earns just 950 euros ($1,100) per month. Nearly half of her salary,
400 euros, goes on renting a room she shares with her eight-year-old
daughter.
Another 130 euros is swallowed up by school canteen fees, 100 euros goes
to childcare, leaving just over 300 euros for food, transportation and other
expenses.
“I can’t save, it’s a bit complicated,” Elisabet, who asked that her last
name not be published, told AFP, adding she has not been able to go on
holiday with her daughter for two years.
– ‘Freeze on wages’ –
Spain’s economic downturn sparked a “freeze on wages” and salaries did not
recover when the economy returned to growth because unemployment has remained
high, said Florentino Felgueroso of Madrid-based think tank Fedea.
While Spain’s jobless rate is down from a peak of nearly 27 percent in
2013 to 14.5 percent in September, it is still the second-highest in the
eurozone after Greece.
Real wages actually declined in the last two years, the OECD said in a
report published in July.
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This contrasts with the jump in salaries before the crisis, especially in
the construction sector, said Felgueroso.
Part of the problem is that many of the newly created jobs are temporary
rather than permanent, and their duration has been reduced considerably, with
some lasting just “a week, sometimes less”, he added.
Spain is more reliant on temporary contracts than any other EU nation.
More than one in four workers, 26.9 percent, was employed on a temporary
contract in the second quarter, according to Eurostat.
The percentage of workers in Spain employed part-time when they would
rather work full-time accounted for 8 percent of the total labour force in
2016, compared to 6 percent in the entire eurozone, according to the Bank of
Spain.
– ‘Difficult to correct’ –
Elisabet is a good example. Despite her 15 years’ experience, since the
end of the crisis she had only one permanent contract — and was fired after
just one year.
She said she feels lucky to have a temporary contract, instead of working
under-the-table as in the past.
Felgueroso said “job precarity has become generalised” and especially
affects women.
Socialist Prime Minister Pedro Sanchez, who took office in June, has vowed
to fight for change.
Under Spanish law temporary workers have to be considered permanent after
a period of two years, except in the case of short-term projects or seasonal
jobs.
But loopholes in Spain’s complex labour framework, which comprises dozens
of different contract types, allow many firms to circumvent the rules.
The labour ministry in August contacted nearly 80,000 firms it suspects of
abusing short-term contracts. Some 47,000 of these contracts were converted
to permanent ones the following month.
The government also wants to increase the number of labour inspectors to
crack down on abuse.
“It’s very difficult to correct, it is part of regular practice,” said
Felgueroso.
Sanchez’s minority government has also proposed in its draft 2019 budget –
– which faces an uphill battle to be approved in parliament — raising the
minimum age from 858 euros a month to 1,050 euros.
This would bring it a step closer to Britain’s minimum wage of 1,401
euros, or Germany of 1,498 euros.
BSS/AFP/HR/1030