Pandemic of the difference
In the same half of the largest economic disaster suffered by the Spanish State in recent decades, economic inequalities are increasing. The report published by Oxfam in the context of the Davos forum shows that in 2020 the number of billions of the Spanish State increased to 26 million and its heritage increased by 33% in a single year. On the other side of the coin there are many people who have seen their work or their business lose or deteriorate. And the already widespread risk of poverty has been heightened for many of them.
This increase in the wealth of one billion pandemics outweighs the cost of one of the main measures to combat the disease, the Temporary Employment Regulation (AEVE-ERTE) dossiers. In addition, this increase in the income of the wealthiest has been four times higher than last year’s increase in health spending.
"By 2020, the number of billions in the Spanish State grew to 26, and its wealth increased by 33%"
According to the study, the effect of COVID-19 can restore the inequality rates experienced in the hardest years of the previous crisis. And this risk is based on the loss of jobs for the most vulnerable people, young people, women and migrants. The number of people in extreme poverty with less than 16 euros per day could reach 5.1 million in the State. Thus, this year it would go from 9.2% of the population before the pandemic to 10.86%.According to the report, the EEE has been instrumental in limiting the increase in poverty and inequality, avoiding the risk of falling into poverty
to more than 700.00 people. On the other hand, of the 850,000 homes planned, the minimum income of residence that was approved, has only reached 160,000, according to the central Government. If, in the second part of last year, it had reached all income households, it would have brought 277,000 people out of poverty.
Therefore, intervention in public policies is essential to alleviate the most negative effects of the pandemic crisis, as demonstrated by the EEE and the minimum income lines. The Oxfam report proposes a wide range of measures to prevent the root of this increase in inequality. The organisation recommends, inter alia, the development of alternative employment policies in place of the EEE. To this end, it prioritizes the entry into force of measures to improve the production model, decent employment for businesses and eventuality, temporality and subcontracting. At the same time, it calls for the extension of minimum income coverage, with emphasis on reducing child poverty.
In any case, the fight against inequalities requires comprehensive intervention and the key here, once again, is the change of direction of fiscal policy, as the main instrument for a more equitable redistribution of income. Economists Zucman and Sáez also proclaim, in their last book, the Triumph of Injustice, the fiscal progressivity to fight extreme inequalities. Oxfam defends tax reform in the same direction in his report. Progressive reform to strengthen measures to combat tax evasion and avoidance. We must not fail to mention that in the last decade the weight of corporate tax has decreased considerably and has further collapsed with the pandemic.
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