Why are the people of the Balearics getting poorer?

The context for this exercise was important. Spain's economic miracle was under way by the mid-sixties, the impulse having mainly come from the Stabilisation Pact of 1959. The economy had been thrown open, and the technocrat architects of the miracle had moved on from the processes of regeneration to their detail.

Accused of having had little interest in the distribution of personal wealth as a consequence of the new industries - tourism, automobiles, for example - there was an increasing realisation that this mattered. Spain had long been a country of huge divergence in terms of the geographical spread of wealth. It was now essential to understand if the miracle was contributing to a narrowing of the gap or indeed (and more likely) a widening.

That was the background to this unusual study, the significance of which for Mallorca and the Balearics lay with where the islands (classified as a province) ranked by per capita income comparison with the rest of the country. It was no particular surprise that the three provinces with the highest percentages of the population with the highest incomes were Madrid, Barcelona and Gipuzkoa in the Basque Country. The latter two were historical industrial powerhouses; Madrid was a later arrival for services as well as industry.

In the second group behind these three was Vizcaya, another major Basque centre of industry. But alongside Vizcaya were provinces that on the face of it might have seemed to be more surprising. One among six others was the Balearics. Ballester itemised the provincial distribution of personal income at a municipal level. He showed the number of individuals with average incomes, as of 1965, of 30,000 pesetas or more - 64% of the population in the Balearics. These 64% provided 86% of provincial income. In this respect the Balearics, if not quite at the top table, were sitting pretty next to it.

In 1965 the population of the Balearics was just under 500,000. Roughly two-thirds of it were at an income bracket considered to have been at least comfortable. There were clearly some individuals who were very much more comfortable than others; hence the 86%. And overwhelmingly they were to be found in nineteen municipalities out of 65 at that time (there are now 67). Other than Palma, these included the likes of Inca, a municipality with an historical manufacturing base (e.g. footwear) as well as agriculture. Another was Calvia, which didn't have the same sort of history. Calvia's was new money, it was tourism, Ballester noting that the Balearics (Mallorca above all) was the second most important tourist zone in Spain after the Costa Brava.

By 1965 tourism had clearly had an impact on personal wealth, but this can tend to obscure the fact that Mallorca wasn't as backwards as is sometimes believed prior to the tourist boom. The presence of a well-developed banking system was a reason. Without it, the boom would arguably not have been as great as it was. Nevertheless, tourism was enabling the Balearics to rank high in terms of per capita income, but this was also very uneven. The poorest municipalities were mostly in Mallorca's interior. Many had undergone a process of depopulation throughout the twentieth century - industrial/manufacturing municipalities like Inca and Lloseta were among the exceptions. This only began to be reversed from the start of the 1980s.

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Nowadays, the per capita income tables paint a quite different picture. Valldemossa is consistently identified as being Mallorca's wealthiest municipality, and this is almost exclusively due to the fact that wealthy people have moved there. At the other end of the scale, Capdepera is among the least wealthy. A municipality with sun-and-beach tourism, this does perhaps highlight the fact that tourism hasn't been equitable in its wealth distribution, which is of course one of the great criticisms that is made of tourism.

Wealth unevenness at a municipal level is generally overlooked. There are local development initiatives - the Council of Mallorca has a department for this, for example - but what interests politicians and economists above all is generalised wealth. Per capita income by region (or province) is what matters, and understandably so as there is the need to assess overall well-being in economic terms.

From 1965 on, the Balearics remained on an upward curve. There was dynamic advance. By the time of autonomous regional government, 1983, the Balearics had reached number two in the country with a per capita income of 706,000 pesetas. Madrid was the number one province with 715,193. Forty years later, and the Balearics were in 22nd position out of 50 provinces.

The decline in per capita income has been highlighted by politicians from both left and right. When this decline truly started or when it could have been prevented are both subject to some debate. In 1987, the 'White Paper of Tourism' was produced, a study of the islands' tourism and of policies for the coming years. Six years before, the Balearics had attracted 3.9 million tourists. The year after the paper was published there were 6.7 million tourists, growth in the order of 70%. Coincidental with this paper, an economist, Ferran Navinés, had advocated the zero growth of tourist accommodation places. Instead, the second tourism boom occurred; there was a massive increase in places.

Navinés, by implication, identifies the mid-80s as being when the rot set in. While the Balearics maintained the second spot into the 1990s, this was unsustainable. In regional rather than provincial terms, the Balearics fell from second to seventh place (out of 17) over a period of twenty years up to 2018 and haven't recovered. There was economic growth, and it has at times been spectacular growth, but as Carles Manera, a former Balearic finance minister and now on the board of the Bank of Spain, observed in 2019, this growth did not equate to a distribution of income and wealth in the way in which it should have and was evident elsewhere in Europe.

Antoni Riera, the economist who is coordinating the working parties for the Balearic government's social and political pact for sustainability, said last weekend: "We've been getting poorer for 20 years. In 2000, the per capita income was 22.8% higher than that of a European citizen. Today it is 10% lower." Riera attributes this to a productivity failure and to what should have occurred at the end of the 1990s but didn't - a move from volume to value. Navinés had argued that this should have happened at least ten years before.

The bottom line, if you like, is that the population has grown and grown and has done so in no small part because of immigration and employment opportunities in the tourism industry. Salaries have increased over the years, but these are salaries for an industry not known for paying lavishly. It stands to reason that per capita income will have gone down.

There had been the chance for a rethink in the mid-80s. There should have been one at the end of the 90s. In neither instance was there. The number of tourists was all that seemed to matter. Yes, there were jobs aplenty, but living standards slipped. And now they are having a rethink. Finally.