Wages fail to match price rise

The cost of basic services in Valencia region has risen far more than average wages in the past decade, leading to a decrease in purchasing power and socalled 'energy poverty'

THE INFLATION registered since 2007 triples the amount by which wages have risen in that same period, according to figures of the national statistics institute (INE).

Their data shows that at the start of the financial crisis in 2008 wages continued to increase until 2011, then dropped – but are now starting to recover again.

In total, the average wage for the Valencia region in 2017 was 5.2% higher than a decade earlier.

On the other hand, inflation for the same period increased prices by 14.4%, while data from March of this year shows a 17.3% rise. Therefore, prices have generally increased by around three times more than wages.

This has created a situation where people’s purchasing power has been noticeably affected, especially given the fact that public services and basic supplies are the items that have increased the most.

According to the INE, the price of postal services have increased by 60%, university tuition fees by 58.3%, electricity and gas by 43.1%, water by 41.6%, transport by 38.3%, insurances by 38.3% and food by 19%, all since 2007, while wages only rose by 5.2% on average.

One of the consequences of this disparity is the appearance of a new type of poverty, ‘energy poverty’, which is now a reality for thousands of people in the Valencia region. As an example, the owners of nearly 190,000 households in the region say they can’t afford to keep their homes at an appropriate temperature.