The social crisis derived from the pandemic that administrations and entities have been warning about for months, overwhelmed by requests for help, already has some first estimated figures. The economic situation derived from the coronavirus crisis has caused a decrease in family income of between 7% and 8% in Barcelona and its area. The fall in income has caused a rebound in inequality, which goes back 15 years. And there are at least 129,000 more people at risk of poverty than before the pandemic and more extreme poverty. These are data from a report by the Institute for Regional and Metropolitan Studies (IERMB).
The IERMB, linked to the Autonomous University and the Metropolitan Area, has produced the report, the data of which are estimates, at the request of the administrations, which need to know the extent of the socioeconomic impact of the economic crisis in Barcelona and the 35 surrounding municipalities . But, given that the rent data is released two years late, the report estimates the current figures taking as a reference the latest survey of living conditions (2018-2019), and calculating the data up to the third quarter of 2020 with indicators such as the Labor Force Survey (EPA) and the labor market.
In all the areas that are measured, the estimate contemplates two scenarios: a restrictive one that contemplates the unemployed who seek employment (the EPA) and another that includes those who no longer seek (the case, for example, of workers in sectors that are paralyzed and with no signs of reactivating in the short term).
The study indicates very explicitly that without the coverage of the benefits of the Temporary Employment Regulation Records (ERTE), inequality would have receded “four decades” to levels of the 1980s. The report points to a “moderate” increase in employment. social gap in the Barcelona area. It places the Gini coefficient (which measures the difference in income) for 2020 at values between 0.329 and 0.331, while in 2018-2019 it stood at 0.321. The increase is between 2.5 and 3.1 percentage points. Some data that show a “worrying entrenchment of the phenomenon [la desigualdad], a dynamic that reverses the process of building social cohesion prior to the Great Recession and that once again places the level of the income gap above that registered in 1995 (0.325) ”.
The head of the area of social and urban cohesion at the IERMB and co-author of the report, Sergio Porcel, stresses that the current crisis “comes when the increases in inequality and poverty from the previous crisis had not yet been reversed.” And he adds that this blow affects “to a greater degree the most vulnerable, the lower socioeconomic strata, the popular classes and immigrants; while the other crisis was more transversal, it affected more profiles, now there are professionals who have been able to continue teleworking ”.
Porcel also points out that the data clearly show “how in recession periods the crisis always impacts the most precarious workers first, who are those who leave the labor market first (temporary, partial contracts), so the most affected are young , migrants … and the child population who are the children of these employees ”.
The co-author of the report regrets that “inequality had begun to decrease between 2014 and 2018, although it did not revert to the scenario prior to the crisis that erupted in 2008.” “It is another evidence that the reduction of the gap was based on the creation of a very precarious job,” he insists and highlights the role of the ERTE so that people who are not working continue to have income.
The temporary regulation files and aid for the self-employed have reduced moderate poverty by 18.5% and extreme poverty by 35.7%. The data takes into account the people who are in ERTE but are not charging it.
More intense poverty
The bad news about the increase in poverty, however, not only speaks of an increase in people at risk of exclusion (between 4 and 5 points out of 20% of poor pre-pandemic), but also points to an “increase in poverty extreme and an increase in the intensity of poverty ”. A phenomenon that was already growing before the pandemic (it affected 5.3% of the population in 2018-2019) and is now increasing by two percentage points.
And, even more worrying: the intensity of poverty is increasing: “The poor population would be even more so today than before the pandemic, with incomes that are farther from the risk of poverty limit.”
The social impact of the economic crisis
Average income reduction in metropolitan households. It has decreased between 7% and 8% in 2020 and is between 32,330 and 32,036 euros per year.
More income inequality in the Barcelona area. The Gini coefficient in 2020 stands at values between 0.329 and 0.331. In 2018.2019 it stood at 0.321. The increase is between 2.5% and 3.1%.
15-year setback in the social gap. Estimates point to an inequality in 2020 greater than that in 1995 (0.325) and much greater than the one reduced before the 2008 crisis (0.293 in 2006).
More people at risk of poverty. In the metropolitan area of Barcelona in 2020 there are between 129,000 and 152,000 more people at risk of poverty than before the pandemic (there were 648,000, one in five).
Poor poorer. Sand extreme poverty also increases (50,000 more people, a total of 221,000), and there is a slight increase in the intensity of poverty.
The profiles most affected by the crisis. Those who had the most precarious employment contracts: young population, of migrant origin and working classes. And also their children.
The role of cushion of the ERTE and aid to the self-employed. The temporary employment regulation files are reducing moderate poverty by 18.5% and extreme poverty by 35.7%.
Rent is a major expense. The metropolitan population that lives in rent has destined more percentage of its rent to pay it due to the fall in rent. It goes from 40% in 2018-2019 to between 43.8% and 44.9%. The population that allocates more than 40% to rent goes from 13% to 16%.