An ugly truth

 

"The Banco de España confirms that company profits grew seven times more than wages in 2022.

The institution says that companies have transferred the increase in costs to sales prices and have improved or maintained their profitability during the current period of high inflation."

Found at BoT : a great summary of Iberia's news.

(Original source at ElDiario here.)

"Wealth inequality in Spain deepens as poorest get poorer and corporate profits soar..."

"An analysis of tax data in Spain shows how austerity and labour market counter-reforms have slashed the wage share of the country’s wealth to new lows while corporate profits have soared. 


The findings by economist Gabriel Flores published in online newspaper Nueva Tribuna are:

• Labour income has declined as a proportion of GDP from 50% in 2008 to 46.9% in the first quarter of 2017

• Corporate profits after taxes, interest and dividends, have more than doubled from 8% of GDP in 2008 to 17.5% today

• Austerity policies have benefitted high earners but the lowest paid have seen a significant fall in income

• The 650,000 odd Spaniards on incomes above 60,000 euros annually saw a 10% rise in income, the income of the 6 million on less than 12,000 euros dropped by 8% and the 10 million on 12,000-60,000 euros a year increased by about 6%

• Despite high GDP growth rates in 2015-2017 (3%-plus), the trend towards greater inequality among the majority relying on wages for their income has been consolidated

• None of the above data includes the black economy, where low and insecure wages dominate.

Says Flores:

“This strong growth in business profitability, based on the successive reforms of the labour market, has occurred at the expense of lower tax revenues of the state and lower labor income, multiplying social inequalities.

“All the inequality indicators show that, despite the high GDP growth rates between 2015 and 2017, the trend towards greater inequality has been consolidated among the majority that rely on wages.

“To reverse the inequality to pre-crisis levels it is not enough to increase the GDP growth rates; it is necessary to repeal the successive reforms of the labour market approved in recent years and to distance as much as possible the economic policy from the principles of austerity and wage devaluation that have guided government decisions.”

Flores calls for “an inclusive growth model in which the important thing is not the amount of growth but the redistribution and good management of growth to meet the needs of the majority, improve their welfare and secure an equitable distribution of income, restoring the principle of social, territorial and economic cohesion as a guide to economic policy.”

Source: translated at Revolting Europe.

"Squatting in Vilafranca" -- My latest column for Catalonia Today magazine

[Graffiti wall in Vilafranca: “Enough speculation! The Penedès is not for sale!]

 If global warming is likely to be the biggest problem facing society in the coming years, it will certainly be competing with housing as an issue of great public concern. 

While the situation is probably most severe in Barcelona, the people of a medium-sized Catalan town such as Vilafranca del Penedès are certainly not free from these pressures.

One group who have acted against what they see as a major cause of housing difficulties is a squatter's collective that supports the politics of the Esquerra Independentista [independent left] movement. Recently, they took occupation of a former industrial building in the north of Vilafranca and have re-named it “El Taller” (The Workshop).

“We have done this to protest against real estate speculation,” says their 21-year-old spokesman, who did not wish to be named or photographed. “But we also want to do productive things with this place. We are converting it into somewhere for people to meet to discuss politics, to drink coffee, and to have concerts and theatre performances. We are even creating a studio upstairs.”

According to the collective, the site they have taken over has been empty for at least four years, and is zoned to be eventually knocked down for redevelopment.

“The local people were happy when we moved in because there was a lot of rubbish lying around the building and no one was cleaning it up. But we did,” says their spokesman. “We're making something good out of a place that had no owner and we are doing it without any help from the Vilafranca town council. It was difficult to get this all happening but we will stay here.”

In a very different position to those who occupy vacant buildings are Vilafranca residents, Teresa and Jose. They have a rural property outside the town that is being lived in by a man without their permission. The couple have tried to avoid legal proceedings with the squatter for several years but have recently changed their approach of attempts at persuasion and conciliation.

“We were told we needed a judge's order to get him out of our house,” Teresa explains. “Our decision was to hire a private lawyer because using a public one takes much more time.”

“The procedure has taken two months to get to court and has cost us two thousand euros, but at the moment he's still there and he has smashed up half the house,” says Jose.

Speaking to some other people over lunch in Vilafranca, it is not difficult to find a common theme. There seems to be an acceptance that the government could not or would not do much to solve problems relating to housing. Apart from one suggestion that taxes should be reduced on houses, there is little genuine hope that improvements were possible coming from elected representatives.

“The introduction of the euro was what started our struggles,” says Silvia. “And the price of houses is the other burden. We pay more than double compared to those in southern Spain. The middle class has shrunk completely. Everything needs to be changed!”

Without knowing it, another woman also agrees with the squatters collective on the subject of profiteering in the real estate industry. She suggests that the high levels of speculation now means that for single people it is impossible to buy a house or even rent a decent apartment.
“Everyone has to live with their parents or share accommodation with at least one other person if they are to afford to have any quality of life,” she argues.

There is something here that is beyond dispute, though. Almost anyone would see the common sense in a group of energetic and optimistic young people making good use of a long-abandoned building, as with the Vilafranca squatters group. However, the question that does remain is: How should this happen, both legally and ethically?

[This article was first published in Catalonia Today magazine, February 2017.]