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Rich-poor divide grows fastest in Spain

The income gap between rich and poor families widened faster in Spain than in any other of the 34 members of the international economic organization OECD, a new study reports.

Published: 16 May 2013 11:53 CEST

Rich-poor divide grows fastest in Spain

Social inequality growth in Spain is on the rise. Photo: PEDRO ARMESTRE/AFP

The Organisation for Economic Co-operation and Development (OECD) has released a report investigating income inequalities in 30 of its 34 member states.

From 2007 to 2010, the period of the study, the growth in disparity in family income grew fastest in Spain, according to press agency EFE.

Measured using the so-called Gini co-efficient statistical analysis, the gap between the worst and best-paid families widened by 2.9%.

Slovakia came a distant second with 1.4% followed by France and Sweden with 1%.

The largest falls in average income were measured in Iceland (12%), New Zealand (8%), Greece (8%), Estonia (6%) and Mexico (6%), while Spain joined Ireland on the fringe of this group with just under 6%.

The OECD average fall in income was 2% over the three-year period.

Countries that saw their average income increase included Poland (4%) and Chile (3%).

Overall inequality was greatest in countries with high percentages of poor people including Israel (20.9%), Mexico (20.4%), Turkey (19.3%), Chile (18%), United States (17.4%), Japan (16%) and Spain (15.4 %).

The secretary general of the OECD, Ángel Gurría, commented on the data, stressing "the need to protect the most vulnerable in society, especially as governments continue the necessary mission of getting public spending under control."

He added: "Policies must be designed to promote employment and growth to ensure equality, efficiency and inclusion."

Gurría said that he considered it "essential" to reform tax systems to ensure fairness and guarantee the provision of essential benefits.

The OECD is an international economic organization of 34 countries founded in 1961 to stimulate economic progress and world trade.

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Leaving out payments to refugees, the increase was 23 percent compared with the same quarter last year, according to a new report from Sweden’s National Board of Health and Welfare (Socialstyrelsen) based on figures from Statistics Sweden (SCB).

“Many things may have caused the increase, but the largest part is likely due to the prevailing weak economy and increased unemployment,” Mary Nilsson, head of Socialstyrelsen’s division for individual and family care, said in a statement.

Altogether, Swedish municipalities paid out around 2.72 billion ($389 million) kronor during the third quarter, including assistance to newly arrived refugees.

Payment increased in nearly all of Sweden’s 290 municipalities.

So far this year, social assistance payments – excluding refugee assistance – have increased by 20 percent.

The numbers indicate that payments for 2009 will likely rise by more than the 18 percent increase forecast by the Swedish Association of Local Authorities and Regions (SALAR).

“The rate of increase doesn’t seem to be slowing down,” SALAR’s Leif Klingensjö told TT.

Most in need of payments are young people and refugees, according to Klingensjö.

He said both groups have difficulties getting into the labour market system during tough economic times, and as a result aren’t able to receive unemployment insurance benefits.

“The biggest problem is getting into the job market. If you haven’t had any contact with the labour market, that’s going to be a problem,” said Klingensjö.

In 276 municipalities, payments increased, while 13 municipalities reported a decrease in payments since the start of the year.

The statistics on Sweden’s social assistance also reveal large differences across the country.

Örebro County in central Sweden had the highest increase in payments during the third quarter, 41 percent, followed by Gävleborg County in eastern Sweden, which saw a 37 percent increase in payments.

In Stockholm, social assistance payments increased by 15 percent during the third quarter.

“One can assume that it has to do with the job market,” Nilsson told the TT news agency.

She added that there may be other connections in explaining the regional differences in social assistance payments such as unemployment insurance payments which have been much lower than both the government and the National Public Employment Agency (Arbetsförmedlingen) expected.

According to Nilsson, the increase in social assistance payments may be a related phenomenon.

“There are a lot of people who aren’t members of an unemployment insurance fund (a-kassa), so that connection may exist,” she said.

In addition, it has become harder for people who have lost their jobs to fulfill the conditions required to receive unemployment insurance payments.

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