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Spain one of the worst EU countries for income inequality: report

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Spain one of the worst EU countries for income inequality: report
Young people are particularly likely to be in temporary employment in Spain. Photo: Pau Barrena/AFP
11:00 CET+01:00
A new report by the European Commission warns that while Spain's economy is improving it is among the worst performers in the union for income inequality, and young people are in a risky position.

Spain, along with Greece, Bulgaria and Lithuania faces a "critical situation in terms of income inequality" according to the draft 2018 Joint Employment Report by the European Commission, which uses data from 2016 and early 2017.

The richest 20 percent of households in the country received an income share 6.5 percent times that of the poorest 20 percent, compared to an average of 5.1 times across the union, and almost twice as high as the values for the best performers.

And though in general the economic situation across the union continues to improve, there are "very substantial differences" between Member States. Unemployment ranges from 3.1 percent in the Czech Republic to 17.3 percent in Spain and 21.6 percent in Greece.

Youth unemployment in particular is a problem for Spain, sitting at 40 percent compared to an EU average of 18.7 percent, while more than 70 percent of young workers in the country are working under a temporary contract (compared to only 13.1 percent for workers aged 25-49).

READ ALSO: Tourism helps Spanish unemployment to sink, but most new jobs temporary

The delicate situation for Spain’s youth is also reflected in its early school leaving rate, which is close to 20 percent, meaning it is flagged as a "critical situation". The EU average is 10.7 percent, and the target set for Member States is 10 percent.

The European Commission did however praise a Spanish digital skills training programme of training designed for the digital industry and new business models as an example of "good practice" when it comes to investing in re-skilling young people in order to make them more employable.

Spain was also one of the countries where a quicker-than-average drop in the unemployment rate was recorded, as well as a quicker than average shortening of the gender pay gap.

But the share of people at risk of poverty or social exclusion in the Iberian nation is significantly higher than the EU average, and 22 percent of the population is at risk of monetary poverty, compared to countries like Denmark and Finland here it is below 12 percent.

Spain’s 17.3 percent unemployment rate is ultimately one of the worst, and with a long-term unemployment rate of 9.5 percent "the long term unemployment challenge still appears to be pressing in Spain," the report concluded.

READ ALSO: Catalonia crisis could impact Spanish economic growth, European Commission says

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