Expenses related to the payment of housing and its supplies are by far the ones that have increased the most in family budgets, thus unbalancing the economies of millions of families in our country, denounced this morning. Natalia Peirogeneral secretary of Spanish Caritasand Daniel Rodríguez, member of the Foessa Foundation's research team, who presented the report entitled 'Income and expenses: an equation that conditions our quality of life'.
Throughout his speech, unbalancing data were revealed in a socioeconomic context that continues to test the ability of households to survive, the report states.
For example, the lower income families spend more than six out of every 10 euros (63 %) on housing, supplies and food, compared to less than four out of every 10 euros spent by families with higher incomes.
The actual figure, according to Caritas and Foessa Foundation, is that three million households (16.8 %) remain below the severe poverty line once these basic expenses, which represent a significant effort, have been paid.
Another significant piece of contextual information is that while social housing stock in the European Union is around 9 percent, and in countries such as the Netherlands it even reaches 30 percent, in Spain the percentage is still 2 percent.
Natalia Peiro noted at the outset that "since the onset of the shocking tsunami triggered by the Covid-19 pandemic, whose consequences spanned both the social and economic spheres, along with its immense cost in terms of health, various events have continued to plague families and their economies. Challenges such as the conflict in Ukraine, the rising costs of energy supplies or the inflationary crisis, continue to test the ability of households to meet essential expenses such as food and housing".
In this line, Daniel Rodriguez has assured that "while it is necessary to address the income-expenditure equation simultaneously, probably the most pronounced deficit is currently in the area of expenditure. Thus, despite a moderate but steady growth in income, expenses, with special mention to housing, have risen significantly, which has generated significant challenges in terms of affordability and financial sustainability for many households".
In his opinion, the rate of severe material deprivation has not shown a decrease proportional to the increase in total income. "This suggests that other factors, and in particular expenditures, may be playing a critical role in determining the living conditions of the population," he stressed.
The scourge of inflation
The Foessa study points out that while it is encouraging that income in Spain has increased by 11 % since the financial crisis of 2008, "the truth is that the inflationary context of recent months has caused household spending to increase by 30 %".
This disparity is even more pronounced among the poorest households, since the increase in income in these families has been practically non-existent (0.5 %).
The mismatch between the growth in income and the increase in expenses - together with the high percentage of working poor (11.7 %), and the low coverage and protective intensity of the minimum income (only 44 % of the population in severe poverty receive it) - "is causing the capacity of many families that were already in a situation of vulnerability to be overwhelmed.
"In fact, the percentage of households in severe material poverty already stands at 8.1 % of the population (3.8 million people)," the expert pointed out.
Very precarious balances
Two of the solutions carried out by many households to reduce expenses, according to the report, is to share housing, or reduce energy expenditure. According to the latest data from the INE's Living Conditions Survey (2022), the number of families who could not keep their homes at an adequate temperature increased by 189 % compared to 2008, Daniel Rodriguez recalled.
"There is a constant precarious balance between guaranteeing the payment of the monthly housing payment and its supplies in the first days of the month, at the expense of falling below the severe poverty line and, as a result, neglecting other fundamental household needs. This struggle to find a balance between all the essential needs of the family becomes a constant challenge, since, despite the efforts and strategies implemented, it is often difficult to achieve a decent standard of living," explained Daniel Rodriguez.
More years and more effort for housing
The effort a family must make to acquire a roof over its head is also on the rise. Today it takes 7.7 years of gross annual income to buy a home, compared to 2.9 years in 1987. "Not only are more years needed, but in most cases, income is made up from various sources, as there are many more households with more than two incomes thanks to the incorporation of women into the labor market," said the sociologist from the Foessa Foundation.
Buying a home is not the only cause of stress on household finances. Half of the households with a rental home also suffer from financial stress. According to data from Einsfoessa 2021, using 2020 data, one-third of the rental population are in moderate stress and, even more worryingly, 16 % of the rental population experience extreme financial stress. This means that rent payments account for more than 60% of their income.
"As we learned in the Great Financial Recession of 2008, these precarious situations can be the prelude to even more severe crises, such as evictions and foreclosures. When families constantly struggle to cover housing costs, they become vulnerable to losing their homes and financial collapse," said Daniel Rodriguez.
As for food spending, the sociologist commented that we are witnessing "a brutal escalation of prices", and gave the example of olive oil, which is close to ten euros per liter in many supermarkets.
The study proposes some considerations in the area of both income and expenditure to improve the financial equilibrium of households. To this end, it considers the following to be decisive:
1) Concrete and effective intervention actions to guarantee access to decent and adequate housing (see art. 47 of the Spanish Constitution), such as enlarge the number of social housing units for rent, "which would provide families with an affordable and secure option to obtain quality housing at affordable prices."
2) Plan and coordinate employment policies The company's programs are focused on groups with more difficult access to the labor market and take into account the personal and family situation of the worker.
3) Addressing job insecurity from a comprehensive perspective. "To achieve this, we must chart a course that continues on the path of reducing the temporary nature of contracts and the part-time nature of working hours, allowing more people to access full-time jobs with all the benefits that this entails."
4) To make the necessary legislative changes to ensure that domestic workers, The vast majority of them are women, to achieve full equality of labor and social security rights.
5) Establish an assurance system for minimum income with sufficient coverage, reaching the entire population in a situation of severe poverty, including people in an irregular administrative situation.
6) "The aforementioned system of minimum income guarantee The amounts must also be sufficient, i.e., they must be in line with real prices and the cost of living, as well as with family composition. In addition, the commitment of both the central government and the autonomous regions is necessary, offering complementarity between the benefits provided by each of the levels of public administration," according to the report.