Spanish Households Income Is Still Below 2008 Levels Against Other EU Countries

Household savings rate at historical lows

A report from the European Commission published on Monday said that Spain is one of the countries in the European Union where households’ gross available income was still below levels of 2008 up to the first half of last year, according to Europa Press. The report was about employment and social evolution in the community block.

The study highlights that households’ financial situation improved in almost all the member states at a anual rate of 1.5% up to the first half of 2017, thanks mainly to the increase in wages.

That said, in various countries like Spain, Croatia, Greece, Italy, Portugal and the Netherlands, households’ available income is still below levels of a decade ago, when the financial crisis began.

The report flags that employment in the EU rose above expectations in the third quarter of last year, supported by “solid” economic growth. The employment rate grew 1.7% with respect to the same period a year earlier, both in the Eurozone as well as in the EU as whole. This means 4 million and 2.7 million more jobs, respectively.

In this context, full-time and indefinite contracts accounted for the lion’s share of the growth. The number of employees with indefinite contracts rose by 2.8 million between the third quarter of 2016 and the third quarter of 2017. This growth is three times higher than that for temporary contracts.

Along the same lines, full-time contracts rose by approximately 3 million to 181 million, while 300.000 more part-time workers were registered, taking the total to 42.7 million.

The level of unemployment fell in all the member states in December last year. The biggest declines were recorded in Greece (2.7 percentage points) and Portugal (2.4 percentage points). That said, there are still important differences amongst the European partners. The lowest rates (2.3% unemployment in the Czech Republic or 3.6% in Germany contrasts with those in Greece (20.7%) and Spain (16.4%).

Meanwhile, the long-term unemployment rate fell half a percentage point in the third quarter of 2017, although the proportion of long-term unemployed compared with the total number of unemployed remained around 45%.

Spain has the second highest long-term jobless rate

Spain saw a drop of two percentage points in its long-term unemployment rate, the biggest decline in all the community block, ahead of Portugal (1.9%). But that did not prevent it from having the second highest long-term jobless rate in the whole of the community.

Greece is in fact the country where a greater part of the active population spends more time without a job (15.3%), followed by Spain (7.1%) and Italy (6.2%).

*Photo: Flickr / Juan Carlos Peaguda

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.