Spain Poverty: Housing, Food Costs Risk Diets of 6M People

Spain’s Poverty Paradox: Housing and Food Expenses Threaten the Diets of 6 Million People

Struggling for Necessities: Housing and Food Expenditure in Spain

In Spain, the combined cost of housing and food is now consuming 60% of the income for families with the fewest resources, causing them to forgo certain foods such as olive oil. According to a report published by Sputnik News on November 11, 2023, approximately six million people in Spain are facing such severe nutritional deprivation that they are unable to maintain an adequate diet, endangering their physical and emotional well-being.

The Crushing Cost of Living

The rapid increase in the price of a basic basket of food items, unparalleled with the low purchasing power from meager salaries, has become a major concern for a significant segment of the Spanish population. The charity organization Cáritas reports a “disturbing reality” where a “significant” number of people struggle to access “adequate and nutritious” food.

In a study titled “Income and Expenditure: An Equation that Conditions Our Quality of Life,” conducted with the FOESSA Foundation (Promotion of Social Studies and Applied Sociology), authors highlight steep increases in the prices of widely consumed staple foods, including more than a 20% increase for bread and fresh fruit, a 34% increase for coffee, cocoa, and infusions, and a 36% increase for legumes. Furthermore, the prices for eggs, potatoes, and milk have surged by over 40%, while sugar and oils have experienced a significant jump of more than 60%.

Since income levels have not risen at the same pace as inflation, the result is an increasing impoverishment, with the worst affected being 5.5% of families, nearly six million people, who “cannot afford a meal that includes meat, chicken, or fish (or their vegetarian substitutes) at least every two days,” a fact also confirmed by the National Statistics Institute (INE) 2022 Living Conditions Survey.

The Burden of Housing Expenses

The rise in monthly mortgage payments due to increasing interest rates and skyrocketing rental prices has caused considerable distress to many more citizens. Spaniards, on average, spend 16% of their income on food alone.

According to Cáritas, since the conclusion of the financial crisis in 2015, the prices for purchasing a home have increased by 51%. In the specific case of new housing, the rise is even more pronounced at 74%. This means that a family that could have bought a new home for €100,000 in 2015 would have to pay €174,000 in 2023.

The INE data indicates an 8% increase in rent prices between 2015 and 2023. However, Cáritas suggests this figure is misleadingly low given that contracts often index to the Consumer Price Index (CPI) or inflation, which had surpassed 10% in July 2022 (and was at 3.5% in October). Despite government restrictions on rental price increases to a maximum of 2%, Cáritas has noted a 44% increase in rental prices across Spain for the same period, according to ads from major real estate portals. As reported by El Idealista, the leading portal, the average rental price in Spain in 2023 is €11.8 per square meter, equating to an average of €944 for an 80m² property. For a family where both parents earn the minimum wage (€1,080), this price exceeds the advised limit of 30% of income dedicated to housing costs.

Consequently, individuals from the poorest quintile spend 42.6% of their income on housing, energy, and water expenses. When food costs are added, Spanish families in this bracket allocate 6 out of every 10 euros to their basic existence, not accounting for education, health, and unexpected expenses. As a result, 8.7% of the population struggles with “great difficulty” to reach the end of the month, as per the INE.

The Fracture of Inequality

Many Spanish residents have been forced to revisit their food budget, simplistically put, eating less and/or worse to afford their homes. The uncertainty of not being able to provide enough food, both in quantity and quality, weighs heavily on emotional well-being and, in extreme cases, stigmatizes entire households, as reported in the study. In 2021, 23% of the population had to reduce food expenditure, either by buying cheaper products or outrightly depriving themselves.

The situation exacerbates inequality in Spain, a key factor in the current crisis. Economist Fernando Luengo remarked to Sputnik that without addressing the inequality issue, there can be no progress. With the top 1.1% of the global population owning 45.8% of wealth, and the lower 52.5% holding a mere 1.2%, the disparity is stark. The anti-inflationary policies of the European Central Bank and other central banks have pushed up the price of money, devaluing already modest wages and undermining purchasing power.

“The belief that is very entrenched in conservative economic thought is that there exists a structural relationship between workers’ wages and price behavior: if the former moderates or decreases, inflationary pressures will be contained,” Luengo explains.

In Spain, prices continue to rise by 3.5%. The aim is to achieve a “non-accelerating inflation rate of unemployment” (NAIRU), which ultimately perpetuates unemployment and weakens unions through what Luengo describes as a “class strategy.”

The Symbolic Olive Oil Crisis

A symbol of the Mediterranean diet, olive oil consumption has declined by 51% in the first half of 2023, with prices tripling compared to 2021. Over the past three months, the price of a liter of generic brand virgin extra olive oil has suspiciously settled at €9.25 across eight leading supermarket chains. Consumer organizations have denounced this uniform pricing as a possible act of price-fixing.

FACUA-Consumers in Action has reported this issue to the National Commission on Markets and Competition (CNMC), suggesting it may represent illegal increases in profit margins that defy the legal defense against unfair competition.

A Drift in Direction

Energy poverty remains a persistent issue in Spain, with over 3.2 million families unable to maintain a thermal comfort, resulting in implications for physical health. Amidst these difficulties, some voices rally for an increase in military budget and a bolster of the European defense industry. Luengo recalls statements from Josep Borrell and notes that military spending has already significantly grown in the EU following the conflict in Ukraine.

A debate and action are urgent as inequality continues to rise or at least remain at high levels, concludes Luengo. The push for strengthening the military-industrial complex is winning over other considerations, as he believes, leading to a project that is drifting without course.

For further insights and developments on this pressing issue, readers are encouraged to stay updated with Sputnik News.

Leave a Comment