Wednesday, June 01, 2016

Out Of Whack: Mallorcan society

These have been a depressing few days. The church's charity, Caritas, spoke of the chronic poverty that afflicts part of Mallorcan society. The town hall in Palma has increased the amount it spends on economic aid to people of the city. Average income levels in the Balearics as a whole are well below what they were some eight years ago.

The latter, it needs pointing out, were 2014 figures, but whether there would be much difference some eighteen months on might be questionable. The experience in Palma would suggest not, albeit there is a caveat in that the town hall has expanded the scope for the aid it hands out.

What is particularly depressing is the fact that there is meant to be an economic recovery. To counter the poverty and incomes' reports have been those which point to what is pretty much a boom time on the high streets (if there were such things). Retail has not known any better times for the past fourteen years. Astonishing. Meanwhile, the price of property goes up, and Ibiza Town can claim to be the most expensive place in Spain. Incredible.

Ignore the depressing reports, adopt an I'm All Right Jack approach and things are astonishing and incredible. But those reports shouldn't be ignored. Things aren't right. They are far from being right. The unions are referring to a structural crisis. The economic one may have passed (for many) but it has left behind a widening imbalance, a major disequilibrium. Maybe it can be possible to begin to appreciate why the Partido Popular, having presided over austerity-turning-riches, is unpopular enough for the electorate to give the likes of Podemos houseroom, even if some of this electorate has previously voted PP. It isn't just corruption. It's the pocket. And the pocket has been picked.

But not for everyone of course. Want to know something else astonishing and incredible? There are 636 owners of more than 32,000 properties in the Balearics: that's fifty each. These aren't banks, these are real people (or real people's companies). In the past ten years the single ownership of multiple properties - from six to ten, from eleven to twenty-five, from twenty-six to fifty - has gone up by roughly 60%.

This, in no small part, has come about because the property market bubble burst so dramatically (albeit not at the top end). Lower-priced property, and lots of it, was available. But it still required someone with a good deal of spare cash to go on a property-buying spree. The time to cash in may have arrived.

The property market, you have the impression (and there seems to be evidence every day to support this), is totally out of whack. (Or rather it's very much in whack if you happen to be among the acquisitive class.) You can never accuse Balearic teachers of missing a good opportunity to indulge in a spot of propaganda, but the image of tented accommodation for one of its membership in Ibiza might be more than just agitation. The problems with rented accommodation on that island appear to be worse than in Mallorca, and they're bad enough as it is here.

The regional government is alarmed at the growing disparity, at the problems with housing and at the level of incomes. But it cannot force onto the market what the market won't accept. It can try, as with its idea of linking hotel star ratings to the "quality" of employment, but this stems at least in part from a political agenda that enjoys casting the hotels in the role of the baddie. Yes, they may only offer contracts for a set number of months, but check out some of the earnings: they aren't as bad as they are made out to be. Not when compared, for example, with the similarly low-paid retail sector.

But to come back to retailing and the current boom in sales. How does this square with incomes in general being so modest and having failed to recover to pre-crisis levels? Does one trust the figure for average income, one of just under eleven grand a year? Who is it that is making all the purchases of household goods that weren't being made even a year ago? The owners of those multiple properties? Foreign owners? Those who are kitting out properties with IKEA stuff and posting them onto Airbnb?

Whatever the answers to these, there is unease - fuelled to a degree by politicians on a mission - caused by the seemingly widening gap in society. Recessions, a sort of maxim goes, are economic occasions when advantages can be sought and gained. Property appears to be one of them. Allied to this is the fall in incomes and the unions' structural crisis afflicting the middle as well as working class. And then there's the chronic poverty.

Thankfully, the sun shines. But it hides the clouds.

No comments: