Spain | Inequality, growth, and zero-sum thinking

Economic growth, inequality, and zero-sum thinking form a triangle that has shaped societies over the years. The historical transition from a subsistence economy to one of sustained growth has transformed social perceptions of wealth and how it is distributed.

Key points

• Key points:
• Economic growth has brought about a paradigm shift toward a positive-sum economy, in which income grows enough to benefit a large majority. Therefore, the growth of per capita income has profound implications for how societies perceive inequality.
• Spain’s recent history also fits in with this idea. Inequality during the expansionary period between 1994 and 2007, for the same unemployment rate, was higher than between 2014 and 2022 (the last year with INE statistical data available).
• However, the social perception is that the problem of inequality is greater now than it was then, even though the hard data suggests otherwise. As it happens, income inequality in 2022 (with a Gini index of 31.5, where 0 indicates maximum equity and 100, maximum inequality) reached an all-time low in recent decades, even lower than that recorded in 2003 (31.6).
• In 2024, per capita income was only 6.2% higher than before the Great Recession, and the gap with the EU has widened. In tandem with this, we have witnessed a deleveraging process, bringing Spanish household indebtedness to below the Eurozone average. According to the CIS, the main difficulty now facing Spaniards is finding decent housing.
• It is essential to invest in education and training to reduce the rates of school failure and early school leaving, problems that Spain has been at the forefront of for decades in the European Union.

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