46% of Spain's Minimum Living Income households still receive it five years on
46% of households that started receiving the Ingreso Mínimo Vital, Spain's minimum income scheme, are still on the benefit five years later. AIReF calls for better links with employment.
English · Original discussion in Spanish · Published
Five years of the IMV: 46% of households are still receiving it
How long does it take for a temporary benefit to become structural? In the case of the Ingreso Mínimo Vital (Spain's minimum living income), the answer points to five years. 46% of the households that started receiving the benefit are still on it five years later, according to the data held by AIReF (Spain's independent fiscal watchdog), which adds an uncomfortable nuance: permanence is higher among those receiving an amount close to the guaranteed income. In other words: the less the benefit separates you from the way out, the less urgency you have to leave.
What AIReF is asking for regarding the Ingreso Mínimo Vital
The independent supervisor is not proposing cuts to the benefit. It proposes improving its connection with employment, which is an elegant way of saying that today that connection does not exist. The figure at the heart of the matter —46% still on it after five years— does not describe a specific group or a specific region: it describes a design. A benefit calculated against household income and withdrawn when the household's income rises only works if the jump into a job genuinely improves your situation. If it does not, the system is paying people not to work without meaning to.
The gap that kills the job search
Here comes the number that comes up in every conversation at the pub: 733 euros a month. On that basis, a full-time job that adds barely 200 euros more becomes a bad deal: commuting, hours, boss and colleagues included. The jump from the benefit to a wage can be so narrow that the worker sees no reason to move. The obvious objection is that a benefit is not a wage: it does not pay the same social contributions, does not build a career or rights. True. It is also true that, at the end of the month, your pocket cannot tell the difference between paying contributions and receiving a benefit.
Two to three years and that's it
The proposal gaining ground is a time limit: two or three years, with mandatory training and active job searching. It has a blind spot that cannot be ignored: from a certain age —around sixty— the market does not hire, even with accredited training. Turning the benefit into a countdown for those with no way out is not an incentive, it is a sentence with a date on it.
The real debate is not whether the IMV works. It is whether it works for what it claims to do. And there we still wait.
How long does it take for a temporary benefit to become structural? In the case of the Ingreso Mínimo Vital (Spain's minimum living income), the answer points to five years. 46% of the households that started receiving the benefit are still on it five years later, according to the data held by AIReF (Spain's independent fiscal watchdog), which adds an uncomfortable nuance: permanence is higher among those receiving an amount close to the guaranteed income. In other words: the less the benefit separates you from the way out, the less urgency you have to leave.
What AIReF is asking for regarding the Ingreso Mínimo Vital
The independent supervisor is not proposing cuts to the benefit. It proposes improving its connection with employment, which is an elegant way of saying that today that connection does not exist. The figure at the heart of the matter —46% still on it after five years— does not describe a specific group or a specific region: it describes a design. A benefit calculated against household income and withdrawn when the household's income rises only works if the jump into a job genuinely improves your situation. If it does not, the system is paying people not to work without meaning to.
The gap that kills the job search
Here comes the number that comes up in every conversation at the pub: 733 euros a month. On that basis, a full-time job that adds barely 200 euros more becomes a bad deal: commuting, hours, boss and colleagues included. The jump from the benefit to a wage can be so narrow that the worker sees no reason to move. The obvious objection is that a benefit is not a wage: it does not pay the same social contributions, does not build a career or rights. True. It is also true that, at the end of the month, your pocket cannot tell the difference between paying contributions and receiving a benefit.
Two to three years and that's it
The proposal gaining ground is a time limit: two or three years, with mandatory training and active job searching. It has a blind spot that cannot be ignored: from a certain age —around sixty— the market does not hire, even with accredited training. Turning the benefit into a countdown for those with no way out is not an incentive, it is a sentence with a date on it.
The real debate is not whether the IMV works. It is whether it works for what it claims to do. And there we still wait.
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (20 replies).
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