Spain is one of the most unequal countries in the European Union. Second country in terms of wealth inequality, after Germany. Also in child poverty, after Bulgaria, according to Eurostat and the European Anti-Poverty Network. This panorama would be much more dramatic without state intervention. Social security, and in particular public pensions, constitute the great income redistribution machine in Spain. Public pensions are responsible for 60% of the reduction in inequality.
Public pensions also boost production, employment and generate a substantial fiscal return, according to the study. Pensions as an engine of growth. An approach to the Spanish case based on the Sraffian supermultiplierby professors Eladio Febrero and Fernando Bermejo, from the University of Castilla-La Mancha, published in the Political Economy Review.
The existence of such a nuclear social mechanism in Spanish society is the result of a long history of laws that began in 1900 with those on industrial accidents and compulsory retirement of workers (1919). Standards which were developed with new provisions, in particular with the laws of democracy which created INEM, INSALUD, INSERSO and the universalization of public health in 1986 promoted by Minister Ernest Lluch, assassinated by ETA 14 years later. Legal changes favored by numerous mobilizations and intense social struggles.
Of all these reforms, the most important was undoubtedly the Toledo Pension Pact of 1995, in which the Minister of Labor and Social Security, José Antonio Griñán, played a key role. The former Secretary General of Social Security, Octavio Granado, gave an excellent summary of the Toledo Pact in The unique character of a Spanish institution (Fedea), in which the social (unions and employers) and political consensus which enabled this result stands out. Granado values consensus by emphasizing that “the lack of capacity to reach these agreements has caused a real institutional crisis in other countries.”
With this background story, we are once again witnessing the refrain, repeated for 40 years, about the unviability or bankruptcy of public pensions. This is an unfounded hoax that has caught on. Many young people think they will not have a pension. Studies on retirement have a double reading. On the one hand, they can be useful in adapting the public system to the new realities of population aging and the need to improve productivity.
However, there is another message, more cryptic, which suggests the interest of setting up a private system, based on the capitalization of savings. A model that should have been abandoned after the failure of Chile. The unsustainability of private pensions is much more obvious. What happens to the 32% of households who cannot save, according to Funcas.
Practicality requires making an effort and maintaining public pensions, the value of which is beyond doubt. We must seek the necessary consensus and not allow ourselves to be distracted by mirages.
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