“When it seemed that we were beginning to recover from the pandemic, an inflation crisis arrived,” laments Natalia Peiro, general secretary of Cáritas Española. The Catholic organization warns in a report that price increases are causing “60% of vulnerable households to have reduced their electricity, gas or water consumption. And in the most extreme cases in basic food or in medicines”.
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And it reveals a devastating fact: “30% of families do not earn enough to have decent living conditions.” “This new crisis means a higher cost of living for all of society, but it is especially hard on the poorest households,” continues Peiro, who detailed in the presentation of the document that “families with less than 1,500 euros a month already spend the 80% in housing and supplies, food and transport due to the strong price increases, from the previous 70% with respect to the total budget”.
The report is based on a survey of 1,500 families, “50% poor and 50% in a more comfortable situation, carried out between the end of 2020 and the beginning of 2021,” explained Thomas Ubrich, a member of the technical team of the FOESSA Foundation. , who has also participated in the preparation of the report. Based on the results of this survey, the study projects the damage of current inflation.
“The constant inflation of recent months and the marked incidence in housing and supplies, food and transportation is drawing a particularly worrying scenario for families with fewer resources,” stressed Natalia Peiro. “We have an opportunity to act with urgent measures on the consequences of inflation, but the structural problems must be addressed,” she stressed.
“The fear of spending due to uncertainty and the persistence of inflation is not having the freedom to make decisions,” reflected Thomas Ubrich.
Among the most important structural measures, the authors focus on increasing the supply of public housing and reinforcing the Minimum Vital Income (IMV). In fact, the situation is even more complicated by the ECB’s decision to raise interest rates (which directly makes mortgages more expensive) and because wages in the private sector are barely rising due to the refusal of companies to negotiate despite the painful loss of purchasing power.
Decent living conditions
To reach these conclusions, the study proposes the construction of the Reference Budget for Decent Living Conditions (PRCVD). It is a complementary measurement system, which makes it possible to tackle poverty not only based on disposable income, but also associates it with the basic needs of households.
“The PRCVD establishes the minimum budget that a family needs to live with dignity in a specific context. The intention is to adapt said budget to the specific characteristics of each type of household, so that poverty is not defined in an abstract way, based solely on income, but rather in a concrete way, in relation to the needs of households”, Thomas Ubrich specified.
This indicator –on which the EU is also working with the aim of defining a common measurement methodology in the member states– contemplates not only access to food, but also other necessary goods such as housing, its equipment or supplies ( power or internet).
In addition, it takes into account access to rights such as education, leisure, health expenses or attention to dependency situations. In summary, the resulting budget is the sum of eight items of expenses necessary for any household to live in decent living conditions.
Based on this approach to the real needs of households, the study warns that 31.5% of households in Spain (six million families) have an income well below what they would need to live in decent living conditions –that is, they live with an income of less than 85% of their reference budget–. This percentage is higher than the relative poverty rate (20.7%) and the AROPE rate (25.3%), calculated by the INE for the year 2019.
Importance of housing and place of residence
The methodology points out as suffocating the reality of households that have less than 85% of the reference budget. These are households with serious difficulties, whose budget varies very significantly depending on the presence of minors and adolescents in the home, as well as the city of residence.
Thus, in the case of a single-person household in Barcelona, it means living with less than 1,400 euros per month compared to almost 1,000 euros in the city of Cáceres. For a household of a couple with two young people over 13 years of age in Madrid, 85% of the reference budget implies not reaching 2,900 euros per month compared to 2,400 euros in the case of Orense. For a single-parent household with two children under 12 years of age, it means living with less than 2,200 euros in San Sebastián and around 1,300 euros in Ciudad Real.
“Households with serious difficulties in meeting their basic needs are found, above all, among those who live for rent, households with the presence of boys and girls of school age, people with disabilities or situations of dependency, the existence of debts, the absence of stable income and unemployment of some or all active members of the household. It is also crucial to consider the gender gap and the set of added difficulties faced by households headed by a single woman with sole responsibility for raising children”, concluded Thomas Ubrich.