The 14 billion euro decline in salaries and wages is testimony to the huge increase in unemployment in Spain. Interesting is the average wage per each of the 2.2 million lost jobs of 6,480 euros. The crisis demolished the low end of the pay scale.
Other victims include income from property rentals and interest or dividends. The first is obviously a result of over-supply stemming from the building boom and subsequent crash. But the case of investment income (and other current transfers, to some extent) is more than a little ironic, lower returns being to a great degree product of monetary measures to alleviate the effects of the recession. It is easy to conclude that older workers and the retired are the most affected.
Increases in social benefits summing to 9 billion euros have only managed to claw back about 25 per cent of the gross income loss.
Broken down, the major contributors to these benefits show non-contributory pensions providing about half of the total increase. Much of this effect derives from a recent administrative decision. The 400-odd euro monthly subsidy for the long term unemployed over the age of fifty has been reassigned from the unemployment to the pension column - a tacit admission that many of these people will not manage to re-enter the labour force. On the plus side, this payment may serve as a bit of an encouragement to not go back to work. A hidden youth employment subsidy, in effect.
The increase in old age pensions mainly reflects Spanish demographics although a certain amount of corporate downsizing was effected through early retirement.
Charles Butler and José Domingo Rosello
