‘Working poor’ abound in Spain despite recovery

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 per cent, 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 per cent.
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“I can’t save, it’s a bit complicated,” Elisabet, who asked that her last name not be published, said, adding she has not been able to go on holiday with her daughter for two years.
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 per cent in 2013 to 14.5 per cent in September, it is still the second-highest in the euro zone after Greece.
Real wages actually declined in the last two years, the OECD said in a report published in July.
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 per cent, was employed on a temporary contract in the second quarter, according to Eurostat. — AFP