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Average income rises in Andalucía, but salaries are not stretching far enough

Average income rises in Andalucía, but salaries are not stretching far enough

Inflation has led to more people having difficulty paying their energy and grocery bills, despite an increase in per capita income, survey says

Nuria Triguero

Malaga.

Friday, 28 April 2023, 14:16

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There are fewer poor people in Andalucía, but the Andalusians are poorer than before. This apparent paradox could be used to sum up the results of the 2022 Living Conditions Survey, an in-depth analysis of household economies in Spain carried out every year by the national statistics institute (INE).

The figures tell us that after the pandemic slump, the improvement of employment and salaries has led to the recovery of the per capita income and a reduction in the poverty rate that is greater in Andalucía than the national average.

This is the good news, but there is also the bad: inflation. The increase in prices across the board, and especially of power and food, has meant that, despite the increase in the average income, there are more people who say they have moderate or serious problems stretching their incomes to the end of the month. There is also an increase in energy and food poverty: when people cannot afford to keep their homes at an adequate temperature or to eat animal protein at least every other day.

The average per capita income went up in 2022 by almost 788 euros in Andalucía (the survey does not offer data by province) to 10,703 euros per person per year: a new all-time maximum.

This increase of nearly eight per cent, greater than the national average (6%), puts the region for the first time above the 10,000-euro threshold and overtakes Murcia, meaning it is no longer second-to-bottom in the country after Extremadura. Residents in Andalucía are still below the Spanish per capita income, but the difference is smaller, going from 2,354 euros to 2,305.

Employment

This increase in average income is linked to improvements in employment (the survey was carried out in the second quarter of 2022, which was a particularly good one for employment) and a rise in salaries and pensions. The proportion of people at risk of poverty was lower, which, as the INE points out, is "a relative indicator of inequality; it doesn't measure absolute poverty, but how many people have low incomes in comparison with the population as a whole".

The poverty line is set at 60 per cent of the median income: anyone below that line is considered to be at risk of poverty. Median income is not the same as average income; it is the value in the middle of the table when all of the incomes are ordered from lowest to highest, so half the individuals are above and half below. The median income in Spain is 16,814 euros and the average is 13,008.

Last year, 29.1% of the people of Andalucía were below the poverty line, compared to 32.3% the previous year. This cold statistic in itself might not be very striking, but when translated into real people, it shows that 2,484,000 people in Andalucía are trapped in this low-income band.

We should take into account, however, that this poverty line figure is taken from data from the year prior to the survey (2021). Therefore in reality the 29.1% refers to 2021 and the 32.3% to 2020.

So if we want to compare the current figures with data from before the pandemic, it is worth looking back at the survey for 2020 which puts the poverty line percentage at 28.5%. We can conclude, therefore, that the new figure is still higher than pre-Covid values.

In any case, the fall in the poverty rate in the latest survey, which has been greater in Andalucía than in other Spanish regions, has pushed the region up in the national ranking. In 2021 (with data from 2020), Andalucía was the region with the highest poverty rate, but a year later it was behind Ceuta, Melilla, Extremadura and the Canaries.

The distance between the Andalusian average and the national average has been reduced although it is still nine percentage points higher (29.1% compared with 20.4%).

The risk of poverty and social exclusion, known by the EU as the Arope rate, has also gone down. This is now at 35.8% (last year's survey put it at 38.7%). However the figure that has fallen the most comparatively is the number of people who live in a household with "low employment intensity": from 18.4% to 12.3%.

Inflation

Despite this undeniable positive progress in financial well-being, the 2022 survey does come with its warning signs. For example, when asked whether they have trouble making their salaries stretch to the end of the month, the number of people who said they had "difficulty" or "great difficulty" has increased since last year. In 2021 the figure was 27.9% and in 2022 it went up to 29.1%.

Similarly, the percentage of people who cannot afford to keep their home at an adequate temperature in Andalucía has risen from 18% to 21%. And those who say that they cannot afford "a meal with meat or fish at least every two days" now amount to 8%, up from 6.8%.

Around 45% of those interviewed for the survey said they would not be able to meet unexpected expenses (before it was 42%) and 6.2% cannot afford to own a car (up from 5.3%).

These results can easily be linked to the two areas where inflation has risen the most in the last year: food and energy.

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