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Average household income grows faster in Malaga province than most of Spain, but it is still among the lowest
Finance

Average household income grows faster in Malaga province than most of Spain, but it is still among the lowest

Households saw their incomes increase by 5.5% in 2021 after the slump caused by the pandemic and Alhaurín de la Torre is again the municipality with the highest average

Friday, 8 December 2023, 10:50

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Malaga is the third province in the whole country where household income increased the most year on year in 2021 - the latest year with published data - after a difficult year in 2020, with the Covid lockdown.

In 2021, although the pandemic was still wreaking havoc, the income of families in Malaga province, including the Costa del Sol, experienced an upturn of 5.5%, standing at 28,574 euros per year net (after tax and social security contributions). Only the Balearic Islands (with 6.9%) and Jaén (with 6.6%) grew more than Malaga, according to official information from the National Statistics Institute (INE) published at the end of October.

Similarities can be found between Malaga and the Balearic Islands that help to understand why they are both leading the post-pandemic growth in per capita wealth, such as the importance of tourism and the ability to attract new residents with high purchasing power. But there is an important difference between the two regions: the Balearic Islands is among the ten provinces with the highest average income in the country, while Malaga is trailing behind, the fifteenth poorest province in Spain. The average income per household in the Balearics (which includes Mallorca, Menorca and Ibiza) is 36,905 euros, while Malaga’s is 23% lower.

The INE net income distribution data makes it possible to analyse the distribution of wealth between regions, provinces, municipalities and even census districts. Within Malaga province, the general increase in household income in 2021 has hardly changed the ranking of municipalities: Alhaurín de la Torre continues to enjoy the highest average income, 36,562 euros gross per household per year, after growing by 7% in 2021. The second is Rincón de la Victoria, with 34,365 euros. In its case, the increase is more discreet, 2.2%. Malaga city is in third position with 31,612 euros and an annual increase of 4.6%. The only change in the top five is that Marbella (29,943 euros) overtakes Antequera (29,002 euros) as the fourth richest municipality in the province, thanks to a significant increase of 7.2%.

The ranking of the richest municipalities also varies substantially if what is measured is the net income per inhabitant rather than per household. From this perspective, Malaga province comes out even worse off in the national ranking: instead of being fifteenth, it is seventh from the bottom, with 10,929 euros per inhabitant. Guipúzcoa is the richest, with 16,887 euros, and only Almeria, Badajoz, Huelva, Cadiz and Alicante are below Malaga in net income per capita, which may be due to several reasons; for example, that taxes penalise Malaga households more heavily than those in other regions or that the average household size is larger, so that the income of each household is divided between more members.

Based on a per inhabitant rather than a per household analysis, instead of Alhaurín de la Torre, Rincón de la Victoria would be the richest in the province with 13,271 euros. But the most striking thing is that in second and third place are Faraján and Cartajima, two small municipalities in the Genal valley, with 12,288 and 11,933 euros respectively. Alhaurín de la Torre and Malaga city are in fourth and fifth place, with 11,917 and 11,902 euros respectively.

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Different from the Treasury ranking

Some may remember that it was not Alhaurín but Benahavís that led the provincial ranking of the richest municipalities. It’s not that it has overtaken it: it’s that the list that Benahavís tops is the one drawn up by the tax agency using a different methodology from that of the INE: the tax body divides the total income declared by each municipality by the number of tax returns filed, while the INE study for 2021 divides the total income by the entire population residing in households in each territory. In this ranking, Benahavís does not appear until the thirteenth position.

Nevertheless Benahavís can boast that, according to the INE report, it is one of the Malaga municipalities with the highest growth in income per household in 2021: up to 12.8% increase in this indicator compared to the previous year.

Other villages with strong relative increases in average wealth during that year are Faraján, Cartajima, Iznate, Canillas de Albaida and Alpandeire. Only three of the 103 municipalities in Malaga continued to lose wealth in 2021: Salares, Almargen and Genalguacil.

Salares and Genalguacil have the dubious honour of being two of the three poorest municipalities in the province: their net income per household in 2021 was 16,465 and 17,337 euros per year, respectively. This is followed by Jubrique, with 17,437. The average household income in these small towns is half that of Alhaurín de la Torre.

Poverty rate drops to 28%

Malaga continues to be one of the provinces with the highest percentage of population at risk of poverty in the whole country. Only Melilla, Almeria, Ceuta, Granada, Alicante, Cadiz and Badajoz are in a worse position in the national ranking, according to the INE. Despite this, there is a positive nuance in 2021: the poverty rate in that year drops from 29.2% in 2020 to 27.8%.

What do we mean when we talk about poverty? A person is considered to be at risk of poverty when their income does not reach 60% of the median income for that territory. The median income is the monetary amount that divides the population into two equal parts. For the year 2022, for example, it is 16,814 euros. This means that half of the Spanish population earns more than this figure and the other half less.

The rate is therefore relative and will depend on how the median income of the total population evolves. If the median income rises, then the poverty line rises, and vice versa if it falls. The consequence is that every year there is a percentage of people who enter or leave poverty figures without having really changed their living conditions.

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