Madrid widens the rich-poor gap while the rest of Spain improves

Inequality in Spain has fallen to historic lows, but Madrid is lagging behind: it is the most unequal big city in the country and the one that has done least to close its gap since 2015. Within the capital, neighbourhoods such as Chamberí and Chamartín are at the very top of the indicator.

Spain has been growing for years at a pace many economists did not expect and, at the same time, has managed to reduce its inequality. Both things at once, something that for decades was presented as incompatible. Data published by the **INE** (Spain's statistics institute) in 2024 paint a picture of general improvement in income distribution, with the country at historic lows in inequality. But there is one exception that refuses to fade away, and it lies in the centre of Madrid.

## Madrid, the big city that does the least to equalise

The Madrid region has a Gini indicator — the measure that runs from 0, perfect distribution, to 100, total imbalance — of **35%** in 2024, compared with the Spanish average of **31.9%**. In other words, Madrid distributes its income worse than the country as a whole, and it does so with one of the highest average incomes in Spain. That combination — plenty of aggregate wealth and plenty of imbalance — is what explains why the capital always makes the headlines.

Madrid has narrowed its gap since the peak of **2015**, when its Gini reached **37.4%**. But it has done so very slowly: barely **2.4 percentage points** in almost a decade. Other provinces that started from similar levels, such as **Seville** or **Tenerife**, have cut their inequality by more than double in the same period. In most large cities inequality has fallen clearly since 2015: more than four points in **Málaga**, **Palma** or **Las Palmas**. Madrid is the exception.

**Mónica Martínez-Bravo**, a professor at **CEMFI**, sums it up clearly: it is the most unequal big city in Spain and the one that has reduced its inequality the least. It is also one of the few where the distance between rich and poor neighbourhoods has increased. In 2024, income in Madrid's richest neighbourhoods grew by **8%**, compared with **6.7%** in the poorest. **36%** of the city's census tracts are in Spain's richest decile.

## Chamberí and Chamartín, at the top of the scale

Inside Madrid there is another Madrid. Several census tracts in the central core have spent a decade at the top of the inequality indicator. The neighbourhoods of **Chamberí** and **Chamartín** stand out, where the Gini sits at **44.8%**, the maximum the scale allows, because some fortunes are so disparate they would distort the calculation. There, residents with very high incomes live alongside people from another era who still remain in these districts.

The geographer **Ricardo Méndez** explains that these areas often coincide with the exits from main road corridors, once occupied by outlying settlements with cheap housing. That mix is pronounced in districts such as **Chamartín** or **Salamanca**, with very distinctive areas in **Prosperidad** and **Guindalera**. The new residents buy homes at sky-high prices, but there are still elderly people, with old incomes or inheritances, whose income profile does not match the value of the land they live on.

**Álvaro Ardura**, a professor of urban planning at the **Madrid School of Architecture** within the **UPM**, recalls that in Chamberí and other central areas there are still remnants of the poor-quality housing built in the early 20th century, when developers pushed to maximise buildable space with corralas (traditional low-income courtyard housing). Even though the price per square metre has soared, those homes do not fit with high-income residents. In the southern periphery of Madrid incomes are much lower, but the population is more uniform: the PAU (planned urban development areas) are homogeneous because development peine all at once.

## The coast and the islands: touristification and high incomes

Stop-and-go urban development, with luxury housing estates and the arrival of foreigners with high incomes, explains much of the inequality poles along the coast. **Benidorm**, **Marbella** or **Alicante** are some of the spots where families with very high incomes concentrate in areas previously occupied by the local population. Méndez points out that residents are segregated, living parallel lives that rarely intersect. The same happens on the islands, especially in **Ibiza** and **Formentera**, with very high inequality rates that refuse to budge.

These indicators also show degrees of touristification or gentrification. The new wealthy inhabitants are taking over the space of traditional residents, with rising housing costs and the price of some services going up. Added to this are the service-sector workers who cater to the new needs of the wealthy. These are pockets of inequality that do not explain the whole story of Spain's improvement, but that resist disappearing.

## Why Spain narrows its gap and Madrid does not

The reduction of inequality in Spain since **2017** has a fairly down-to-earth explanation: growth has come mainly through employment, with rises in the minimum wage and pension upratings. That is the view of Martínez-Bravo, who recalls that wealth concentration around capital is usually what drives GDP growth the most, not necessarily prosperity, which is why it is hard to reduce inequality during periods of high expansion.

The economist warns against celebrating too soon. **2024** is a warning sign: citizens' incomes rose by **6%** and yet inequality barely fell by two tenths. When growth comes from capital income rather than wages, improvement stalls. **Ricardo Molero**, a professor of Economics at the **UAM**, calls the reduction significant, taking the country as a whole to historic lows, but recalls that Spain still has ground to make up on the most equal European economies. Sharp territorial divergences persist between north and south, between coast and inland areas, and between urban and rural zones.

**Clara Martínez-Toledano**, a professor of financial economics at **Imperial College** London, sums it up: INE data show very persistent differences. The **Basque Country** and **Navarra** concentrate a high proportion of high-income municipalities, while **Andalusia** and **Murcia** show a significant concentration of low-income municipalities. But she distinguishes between inequality between territories and inequality within each territory: a region can have a high average income and, at the same time, very large differences among its inhabitants. The provincial capitals of emptied-out Spain, **Galicia** and the rural areas of the north stand out for their especially low indices.

The final picture is that of a country that is becoming more equal than a decade ago, with Madrid as the great exception concentrating the gap. The data come from the INE and should be read with the usual caution: an indicator measures a snapshot, not a film, and the economic decisions that trinc could move it in any direction.