inflation leaves an “unfair footprint”

Inflation caused by the coronavirus pandemic and the war in Ukraine has reduced the purchasing power of the poorest households by 30% more than the richestat the same time ase the profits of large companies have skyrocketed.

In addition, the population at risk of poverty or social exclusion increased to 27.8% during the first year of the pandemic (2020), the highest figure in five years, according to the Living Conditions Survey prepared by Oxfam Intermón.

In a report published this Wednesday under the title ‘Inequality does not go on vacation’, the NGO denounces that the latest economic challenges that families have to face are leaving an “unequal and unfair footprint” in which households The poorest are losing more than the rich.

During the month of June, inflation in Spain stood at 10.2%, the highest figure in almost four decades. According to Oxfam data, despite the fact that inflation has caused purchasing power to be reduced in families with lower incomes, earnings in sectors such as finance, pharmaceuticals, energy or food have skyrocketed in recent months. in a context of economic uncertainty.

In fact, the organization points out that the income of the four largest energy companies in our country has grown by 34% between 2020 and 2021, just at a time when households have had more trouble paying electricity bills. In addition, the profits of the large electricity companies during 2021 have been double the average observed during the previous 5 years.

Specifically, the hydroelectric and nuclear power plants alone would have generated between March 2021 and the same month of 2022 more than 6,500 million euros of benefits “fallen from the sky”.

Increases the cost of living and reduces the ability to save

Currently, after the increase in the price of energyaccording to data from the INE and the survey prepared by the NGO, in households with incomes below 400 euros, follow the same consumption pattern than before the coronavirus pandemic it is 14% more expensive.

The cost of continuing with the same standard of living as two and a half years ago in a household with a monthly income between 1,500 and 1.999 euros costs 11.65% more, and in families with incomes above 5,000 euros, 11 %.

Keeping the same shopping basket has reduced the savings of households with less income. Specifically, the savings capacity of the most vulnerable has worsened 3.5 times more than for those who have more, which, according to the report, “indicates an increase in the gap between the poorest and the richest”.

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Furthermore, Oxfam estimates that, in the first quarter of 2022 alone, 35% of the income of the poorest households has been used to pay for energy. In the wealthiest families, that figure does not exceed 10.7%.

“These data, unfortunately, confirm that inflation does understand classes, punishing some more than others, since life is more expensive for those people who have fewer resources,” says Ernesto García, coordinator of Just Recovery in Spain .

For this reason, the organization has asked the Government to “act urgently” and strengthen social protection mechanisms to guarantee “a responsible and supportive tax system so that those who have the most contribute more.”

Raise the SMI and the IMV to deal with inequality

Although they consider that the “shock measures” approved by the Executive prevent “the worst”, they are not enough to correct the “structural inequalities in our country”, so the “Welfare State” must be strengthened.

Oxfam Intermón rrecommends to the Government a package of 12 measures to “advance towards a fairer, more sustainable and equitable country”. Among them stand out increase the Minimum Vital IncomeY levy a tax on “heavenly profits” to help finance the public policies that will be needed to combat the health, economic and social emergency of the pandemic and the rise in prices as a result of the war in Ukraine.

They also request to focus public support on the sustainability of the self-employed, small and medium-sized companies in the sectors most affected by the price crisis and encourage the energy transition.

In addition, in the workplace they propose to continue increasing the SMI until it reaches 60% of the average salary in Spain, and promote equality between men and women at work.

In search of equity and redistribution in a “solidarity tax system”, the NGO offers to readjust the Wealth Tax with a responsible and solidary tax system so that “those who have the most contribute more.”

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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