Benefits against poverty in the Basque Country

Income Guarantee

Currently, benefits are set at 88% above the minimum professional wage, although in 2012 they were cut by 7%, a reduction that will hopefully be recovered in the future once the economic situation improves. Depending on recipients’ housing requirements, the size of their family or other circumstances, the sum in question can be as high as 200% of the minimum wage. In this sense, the situation in the Basque Country is far superior to that of the majority of Spain’s other autonomous regions, and this has led to some criticism from certain sectors (employer organisations, for example) that claim they are too high and act as a disincentive for people to look for work. The coverage rate for all recipients (both direct recipients and users) per one thousand inhabitants is very high in the Basque Country (71) when in other regions it reaches figures as low as 2.89 in Extremadura or 3.17 in Murcia. In 2010, the Basque Country accounted for 42% of all expenditure in Spain related to these programmes, despite the fact that it had no more than 2.6% of the population estimated to be living in poverty.  Today, due to much greater cuts in other regions than the Basque Country, the data for the Basque Country are undoubtedly even more favourable, with data for 2012 indicating public expenditure on these programmes of over 432 million euros.

As regards the impact of these actions, we should highlight that, at least until the middle of 2012, the poverty rate remained similar to those recorded during earlier years characterised by a much higher level of economic growth in the region. Moreover, this rate is clearly lower than that recorded from 1986-1996 (the period prior to the economic crisis and recession). Largely thanks to its protection system, the situation in the Basque Country is clearly different from that of the rest of Spain, even when we take into account other areas of comparable economic development, such as Catalonia. Unlike this last region, which currently has comparatively high poverty rates within the European context, the Basque Country is at the other extreme, and is counted among those regions with the lowest risk of poverty.

Furthermore, and as stated earlier, the unemployment rate is not as serious in the Basque Country as it is in Spain as a whole. However, this was not the case in 1988, prior to the establishment of the income guarantee policy, when the Basque Country’s unemployment rate was “2.7% higher than the Spanish mean, 3.7% higher than in Catalonia and 6.7% higher than in Madrid”. Again this could indicate that the minimum guaranteed income policy has had some influence.

Currently, nearly 60,000 households receive benefits and income support. Nevertheless, the latest change to the law (2011) established stricter access criteria (as the result of a proposal by the Popular Party, accepted by the Socialist Party). The main difference is that while previously, recipients were only obliged to have been registered with a town council for one year before applying for benefits, they are now required to have been on the register for three years and to prove actual residence (although not legal residence).

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