Facing the Crisis in Southern Europe: Demographic, Political and Social Service Dilemmas Manuel Aguilar Hendrickson Universitat de Barcelona manuel.aguilar.hendrickson@ub.edu The Roatch Lecture The Roatch-Haskell Special Event ASU School of Social Work Phoenix AZ, February 26, 2016
Spain? What s that?
Area: smaller than TX, larger that CA Source: ifitweremyhome. com using Google Maps
Population 2014: 20 per cent larger than CA 50 40 30 20 10 0 Spain California Source: US and Spanish census data
The unexpected migration 50.000.000 45.000.000 40.000.000 35.000.000 30.000.000 25.000.000 20.000.000 15.000.000 10.000.000 5.000.000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: INE
GDP 2013: larger than NY, CA 50 per cent larger 2,5 2,0 1,5 1,0 0,5 0,0 Spain New York California Source: OECD
GDP per capita 2013 70.000 60.000 50.000 40.000 66.533 56.768 30.000 31.812 20.000 10.000 0 Spain New York California Source: OECD
Unemployment 2014: much higher than US, but 100 90 80 70 60 50 40 56,8 56,4 56,9 55,6 Employment / pop Unemployment 30 20 10 0 24,6 12,4 4,8 5,8 Spain Italy New York Arizona Source: OECD & BLS
Social protection: are we crazy spenders? 50 40 30 20 Net private Net public 10 0 USA Spain Denmark Source: OECD
1. The current crisis in Spain and Southern Europe
Not all crisis are born equal 1
A serious hiccup 160 150 140 130 120 110 100 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 United States France Germany GDP 1995 2014 (1995=100) OECD.Stat
A serious hiccup or a boom and a bust 160 150 140 130 120 110 100 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 United States France Germany 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Greece Italy Portugal Spain GDP 1995 2014 (1995=100) OECD.Stat
A serious hiccup or a boom and a bust 160 150 140 130 120 110 100 1995 1998 2001 2004 2007 2010 2013 United States Germany France GDP 1995 2014 (1995=100) OECD.Stat
An unemployment-intensive crisis
100 Employment to population ratio for 25 64 Men Women 90 80 70 60 50 40 30 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Netherlands Germany Greece Spain Italy Source: Eurostat
that has broken our way of coping with unemployment
People living in households with very low work intensity (population aged 0 to 59 years) 22 2007 2014 16,5 11 5,5 0 Denmark Germany Ireland Greece Spain France Italy Portugal Source: Eurostat
6 % Main breadwinner 23 % 5 % 1 % Main breadwinner 30 % 38 % 57 % Spouse 14 % Sons/ daughters Spouse Sons/daughters 26 % 1987 2013 Who s unemployed? The shrinking role of family
Dumping the cost on the poor
Source: B Milanovic from LIS
Severe material deprivation 2007 14 25 20 21,5 15 10 11,5 2007 2014 5 4,7 4,8 3,5 7,1 0 France Spain Greece Source: Eurostat
Inadequate social protection?
How effective are cash benefits to reduce poverty? 60 45 30 20,4 11,7 21,9 16,4 8,9 15 0 10,7 France Ireland Spain Primary Primary + pensions All income Below poverty line (60% of median income) 2014 Source: EU-SILC, tables ilc_li01, ilc_li09 & ilc_li10
How effective are cash benefits to reduce poverty? 60 45 30 20,4 11,7 21,9 16,4 8,9 15 0 10,7 31.3 21.9 24.8 France Ireland Spain Primary Primary + pensions All income Below poverty line (60% of median income) 2014 Source: EU-SILC, tables ilc_li01, ilc_li09 & ilc_li10
Who benefits? 60 45 Lowest 20% Highest 20% 30 15 0 Australia Norway Denmark Netherlands Sweden Canada United Kingdom Korea Belgium Finland Israel United States New Zealand Slovak Republic OECD Germany Czech Republic Iceland Slovenia Estonia Ireland Chile France Hungary Poland Austria Japan Luxembourg Portugal Spain Italy Mexico Greece Turkey Source: OECD SOCX
2. The challenges ahead
An ill-designed Eurozone
An ill-designed Eurozone A single currency, meaning a single monetary policy Interest rates, printing of money decided for all But Very different economies No common fiscal or redistribution policy De facto limited mobility
The territorial breakdown
GDP per capita 2012
Employment rate 2012
Territorial breakdown Who cares for who s brother/sister? National versus European redistribution Dynamic regions What if you don't have? What if they don t want to?
Is our welfare state the one we need?
From Bismarck to what? Bismarckian («continental») welfare states Social insurance-based Maintain income rather than redistribute Based on male breadwinners, life-long jobs In the South, limited development of social assistance («welfare») and paradoxical familialism
From Bismarck to what? Very dependent on balance between age groups Families are our safety net and care provider Little public support At the cost of reducing fertility
Towards «social investment»? Social investment Origins in Scandinavian welfare policies Putting everybody to work Emphasis in child development, education, activation, social care Combined with basic security (pensions, health care) Virtuous combination of efficiency and equality
Towards «social investment»? Can we get there? Path dependencies: existing entitlements, family roles Insiders and outsiders, resistance to changes Can we create jobs for everybody? Costs of transition
Recalibrating our social system A trilemma: Relatively low taxation + tax avoidance Relatively decent coverage for insiders and the middle class Improving the situation of the poorest 10-15 per cent
Thank you very much