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Inequality in Spain rising more than any other OECD members

Source: Xinhua - Wed 19th Mar 2014
Inequality in Spain rising more than any other OECD members

Spain is the country in the Organization for Economic Co-operation and Development (OECD) which has seen the highest growth of inequalities between the richest and poorest sectors of society, according to an OECD report 'Society at a Glance' published on Tuesday.

The report shows that inequality in Spain rose by almost 3% between 2007 and 2010 in Spain, when no other country in the organization saw inequality rise by as much as 1.5%.

As a result Spain is the country with the eighth highest level of inequality in the OECD's 34 members, with only Chile, Mexico, Turkey, the U.S., Israel, Portugal and the Britain suffering worse levels.

The main reason for the rise of inequality in Spain is the increased levels of unemployment, (the country currently has over 25% of the workforce out of work) as a result of the onset of the economic crisis.

The Jobs which were lost tended to be those amongst unskilled workers whose contracts tended to offer them less protection against the crisis. Between 2007 and 2010, the income of the poorest 10% of the Spanish population fell by around 14% per year, while no other country saw the income of its poorest 10% fall by 10% and only Mexico, Greece, Estonia and Ireland saw it fall by over 5%.

While the poorest sector of society was feeling the full force of the crisis, the richest 10% more or less held their own, with their earnings falling by an average of just 1% a year according to the OECD.

Spain also saw the number of households in which no member was earning a wage double (along with Greece and Ireland, 2 countries which would need an EU economic bailout as a result of their economic woes).

"Weak and unequal labor markets led to huge job losses among low-skilled workers and youth and there are risks that these economic difficulties could become entrenched," warns the report, adding that "reforms of social protection and labor markets need to focus on the economic situation of poor households and on improving prospects for long-term unemployed and youth."

Spain is the 2nd country in the OECD where the number of young people aging between 15 and 24 who have neither work, nor in education has most risen.

Even more worrying is the fact that the organization is not optimistic that the slow economic upturn which look to have just started will see any improvement in the social crisis in Spain.

"Economic recovery, even once firmly established, should not be expected to quickly put an end to the social and labor-market crisis. More needs to be done to help families benefit quickly once the economic recovery picks up," says the report, advocating the need to assure basic levels of support for the most vulnerable groups, along with the strengthening of "assistance benefits for the long-term unemployed and poor working-age families," as "a matter of urgency."