The labour market’s role in increasing inequalities during the economic crisis

Albert Recio Andreu, Universitat Autònoma de Barcelona

The economic crisis of 2008 led to an important increase in wage inequalities as the consequence of a drop in salaries that affected, especially, those workers who were already at the lower end of the wage distribution scale. This fall in pay is partly responsible for the growth in the “working poor”, a relatively new phenomenon in Spain.
Key points
  • 1
       Employment sectors traditionally commanding lower pay have been the most affected by wage adjustment. In the hotel and catering sector, for example, pay fell by 12.8% between 2008 and 2016.
  • 2
       The economic crisis has caused an increase in temporary and part-time jobs. Undesired part-time employment increased by over 20 percentage points between 2006 and 2017.
  • 3
       Men earned, on average, 22% more than women in 2008. This percentage reached 24% in 2013 and, although it has declined since, it has not recovered its pre-crisis values.
  • 4
       On average, the wages of extra-Community workers stand 35% below those of Spanish workers. This difference increased during the years of the economic crisis.
Evolution of part-time employment. In percentage, from 2008 to 2017
Evolution of part-time employment. In percentage, from 2008 to 2017

There has been a growth in part-time employment; a type of employment characterised precisely by a high level of wage precarity. Thus, not only have people in paid part-time work grown in number, but so has the percentage of them doing so non-voluntarily, i.e., people who work part time even though they would like to do so full time (graph 1).

Difference between the average wages of men and women. In percentage, from 2008 to 2016
Difference between the average wages of men and women. In percentage, from 2008 to 2016

Women present higher rates of unemployment, of seasonality, of part-time employment and a greater presence at lower levels of the labour hierarchy.

The average wage difference existing between the set of men and that of women tended to grow during the most acute years of the crisis, and although it subsequently declined, in 2016 it still exceeded the levels of 2006 (graph 2). According to these data, in 2016 women were earning, on average, around 22% less than men.

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Albert Recio Andreu, Universitat Autònoma de Barcelona

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