Economic crisis and social classes: everyone loses out, especially poorer people

Olga Salido, senior lecturer in Sociology at the Complutense University of Madrid

The recent economic and financial crisis has hit Spain with special intensity, but its effects have not been equal for everyone, since while there has been generalised impoverishment of the entire population, the impact has been much greater on the lower classes. In contrast with what has happened in other countries, the increase in inequality in Spain is more due to the loss of positions in the lower income layers, than to the greater enrichment of the rich.
Key points
  • 1
       In real terms, between 2007 and 2013, the average income of the poorest 10% fell by approximately one third, while that of the richest 10% experienced falls that barely exceeded 10%.
  • 2
       The income share of the richest households (decile 10) has risen from being 9.5 times greater than that of the poorest segment (decile 1) to 13.7 times, due mainly to the fall in income of the lower classes.
  • 3
       Approximately 3 out of every 4 people who in 2008 belonged to the lowest income groups (deciles 1 and 2) remained in the same position after the toughest phase of the crisis.
  • 4
       The crisis has not introduced major changes in the way the cake is shared out, but it has helped to crystallise situations of disadvantage and for this reason has limited the options of progressing for the poorest people.
Mobility paths in different deciles of income between 2008 and 2011
Mobility paths in different deciles of income between 2008 and 2011
During the first and toughest phase of the crisis (2008-2011), the poorest people were the biggest losers. Immobility is maximum at the extremes of the income distribution curve: in 2011, rich and poor people remained largely at the same positions as those from which they set out at the start of the crisis. Mobility between the extremes is practically inexistent (barely 1%-2% move across the income scale in one direction or the other), so the greatest likelihood is that people who are poor will continue to be so three years later. For the poorest people (deciles 1 and 2), the most probable option is that they will remain in their same class of origin or, at most, rise to the lowest strata of the middle class. For the richest people, immobility is the norm: 65.5% of decile 10 remain in the same position; some 13.2% “fall” to decile 9 without ceasing to be rich; and 20% go on to swell the ranks of the middle class.
The middle classes: neither a compact group nor the most vulnerable
Mobility for the middle class occurs above all among positions within the same class. However, the middle class has a different behaviour at its lower and upper extremes. The vulnerability of the lower middle class was greater during the crisis (26% of those who in 2008 were in decile 3 fell into poverty), while 28.4% of decile 8 moved to higher deciles, swelling the ranks of the rich.
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Olga Salido, senior lecturer in Sociology at the Complutense University of Madrid

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