Javier takes a look at the Spanish National Statistics Institute's household budget survey in the post-bubble era.
Basing to the year 2008, the most obvious observation is the degree to which household consumption fell off from 2008 to 2014. Ignoring the very odd results for the highest income group (and perhaps attributing them to sampling error, or something), there's a fairly direct relationship between earnings and change in spending. The group making 3000 to 5000 euros per month saw only a minimal decrease, whereas those making under 500 euros managed to lower their expenses by a full 20 per cent.
The next chart shows the percent change between 2008 and 2014 of the total household budget represented by various outlay items. Fixed (more or less) costs like home rental and auto fuel went up for all groups but, as is to be expected, the lower the income the higher the effect. Interesting is the trajectory of spending on food for the two lowest income groups. It would be easy to conclude that paying the rent and keeping the car running were both accomplished at the expense of the nutrition budget - and yes, tobacco stands out and may be a result of ever increasing taxes proving themselves to be regressive.
Evidently, car purchases suffered at all levels as did spending on restaurants.
Looking at the highest income group from the same perspective, we see a different mix. Auto expenses coincide on the positive side for the two but house rental does not. And the wealthy evidently attempted to maintain their lifestyle by spending more of their budget on holidays, for example. On the negative side, we see the same pattern of the reduction of the weight of basic variable costs of food and medicine relative to the average.
Comparing 2014 to 2008 changes in relative expenditures for the very lowest household income group versus the national average produces the next chart. Again, the necessities of life predominate on the plus side - notwithstanding the appearance of 'leisure and culture' or 'telephone'. The skimping, for its part, took place where it could - less and lower priced foods and medicines, etcetera.
But hidden in the data for the lowest income levels is a huge change in the composition of the group. The chart on the left shows the 2008-14 percentage change in expenditures by income. Total spending of the very lowest income level increased by over 70 per cent over the period - a snapshot of the widespread downward economic migration result of the recession - while average spending went down only marginally.
The combination of this with a 12 per cent drop in spending per 'unit' (e.g. household member) would be a result of larger family sizes at what were higher income levels prior to the crash. This corresponds to the large increase in the rental share of spending. The nouveau poor live, by necessity, in larger homes.
Javier García Echegaray and Charles Butler
