Rise In Electricity And Fuel Causes The Greatest Impoverishment In Two Decades

The unstoppable rise in the price of electricity and fuels has placed inflation at levels not seen since 1992, no less than 29 years ago. And that the CPI is 5.5%, far from being just a figure, it shows a lot in the pockets of workers and pensioners.

Several people wait in front of a SEPE office.
So much so that, according to the data collected by 20 minutes from official sources and statistics, the wage earners under the agreement, the recipients of the minimum wage and those who receive a pension have suffered in this year 2021 the greatest loss of purchasing power of, at least , the last two decades .

It was this Thursday when the National Institute of Statistics (INE) made public that figure of 5.5% increase in prices, a percentage one and a half higher than in September and which reflects the significant increase in the price of the basic basket of products in compared to October last year. The INE itself explains that a good part of this growth is due to “the increases in electricity prices and, to a lesser extent, fuels and lubricants for personal vehicles and gas.”

A fishmonger serves his customers in the Triana market (Seville)
This historical inflation figure has eaten up the salary and pension increases from which workers and pensioners have benefited in 2021. Those who have fared worse have been civil servants and those who receive tax benefits : in January, the Government revalued the salary 0.9% of public employees and retirement pensions, which means that, throughout the year, civil servants and pensioners have lost 4.6 points of purchasing power. Or what is the same: in real terms, every 100 euros they charged at the beginning of the year now equals only 95.4.

The pension reform being processed by the Executive guarantees that pensioners will recover this lost amount from January, since their benefit will be updated with the CPI with which 2021 finally ends . On the contrary, the expected increase in the salary of civil servants for next year is 2%, which would mean that, from one year to the next, public employees would have been impoverished by 3.5 points, as long as inflation is reduced. stick with current figures – most analysts predict it could still rise a few tenths before the end of the year.

Nor is there much better news for salaried employees in the private sector, whether they receive the minimum wage or have their salary subject to an agreement . The minimum wage increase approved in September – from 950 to 965 euros per month – was just 1.57%, that is, 3.9 points less than the CPI growth until October. For their part, the salaries covered by the agreement have grown, on average, 1.46% in 2021: four points less than inflation. And those who receive minimum or non-contributory pensions have seen how the amount of these, in real terms, has decreased 3.7 points due to the increase in the prices of electricity and fuel.

A historic fall
It is not the first time that the rising cost of the basic shopping basket has caused workers and pensioners to become poorer. But, in 2021, this impoverishment is being the greatest in two decades, and also this year is the first since 2016 in which all the groups analyzed – wage earners linked to agreements, civil servants, pensioners and recipients of the minimum wage – lose purchasing power to at the same time, and also in a much more pronounced way than five years ago.

Then, those who saw their purchasing power reduced the most were pensioners, since the 0.25% increase in their benefit approved by the Government of Mariano Rajoy fell very short compared to the 1.6% that prices increased.

In fact, to find losses in purchasing power as important as those experienced this year, we must go back to 2010, when the Executive of José Luis Rodríguez Zapatero, beset by a skyrocketing deficit and pressure from creditors, approved an unprecedented snip. in the salary of officials. On average, Zapatero lowered the salaries of public employees by 5% that year, which, added to the fact that prices rose 3%, caused officials to lose no less than 8% of their capacity from one year to the next. shopping.

In 2010, not only civil servants lost purchasing power, although none of the other groups analyzed suffered such a significant downturn. Retirement pensions lost two purchasing power points, while the minimum wage and private salaries subject to the agreement fell, in real terms, by 1.5%. The only group that emerged unscathed were the recipients of minimum and non-contributory pensions, who saw their purchasing power grow by 1.6%.

Officials have become significantly impoverished
The loss of purchasing power of civil servants was exacerbated in the following three years, since the Government – already with Rajoy in Moncloa – kept public salaries frozen while the cost of living continued to grow, 5.6% in total. In fact, discounting inflation, there is no group among those analyzed that has become more impoverished than civil servants in the last 20 years. Since 2001, public employees have lost 12.4% of purchasing power, while salaried employees subject to the agreement, on the contrary, have gained a scarce 1.8% of purchasing power.

The demonstration of public personnel as they pass through Gran Vía with Paseo de Gracia (Barcelona), this Thursday morning.
Contributory pensions, like the salary of civil servants, have been reduced: in total, 5.4% in real terms. On the contrary, minimum and non-contributory benefits have increased an average of 25.8%, discounting the growth in prices. And the minimum wage has grown by almost 43% -assuming the effect of inflation-, having gained almost half of all this purchasing power in 2019, when it went from 735.9 euros a month to 900 euros.

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