When we talk about starting a business in Spain, we usually imagine the freedom to manage our own time and the potential for growth. However, for a significant portion of this group, the dream of self-employment has transformed into a a truly risky professionwhere the danger is not business failure itself, but falling into suffocating economic insecurity. Far from being a path to stability, self-employment has become for many a mere survival strategy marked by uncertainty.
The situation is critical, and the data doesn't lie: an alarming number of self-employed workers live on incomes that aren't enough to cover even the most basic needs. While the salaried labor market seems to be showing more positive trends, hundreds of thousands of people continue to struggle. trapped in activities that do not generate the necessary cash flow to lead a decent life, creating a worrying social phenomenon that we could define as that of the poor self-employed.
Figures that raise concerns about economic exclusion
If we analyze the reports from the Economic Observatory of Self-Employment and UPTA, the outlook is bleak. It is estimated that one in four self-employed workers They are in a situation of extreme vulnerability. Specifically, data from the Tax Agency reveals that nearly 800.000 people registered as self-employed (RETA) declare monthly income equal to or less than 670 euros, which represents more than 20% of the total of the collective
Within this group, there are more than half a million people who carry out a regular activity and have no other source of income. This means that They survive on less than 900 euros a month...an amount that makes it virtually impossible to cover basic needs and plan for any kind of future. For many, self-employment has not been a well-considered choice, but rather a forced refuge due to a lack of stable job offers.
It's important to highlight that there are very diverse profiles in these lower tiers. We find everyone from people who have just started with the flat rate to family collaborators or those who are about to retire and remain employed to complete their contribution period. Even so, the common denominator is the difficulty in achieving income that allow one to sustain a solid life project.
The insurmountable gap between the self-employed and the salaried worker
There is a glaring disparity when comparing the situation of those who are employed versus the self-employed. According to studies by the CCOO's Primero de Mayo Foundation, the poverty rate is considerably higher among the self-employed. In the periods analyzed, while the overall poverty rate for employed individuals hovered around 12%, the rate for the self-employed... It soared to 36%, a figure that puts Spain in a very unfavorable position compared to the euro area average.
To understand what it means to be poor in Spain, we must look at the data from the Institute for Fiscal Studies. Someone is considered to be at risk of poverty if their annual disposable income does not reach €11.217, and we speak of extreme poverty when it falls below 7.478 euros. In households where business income predominates, the poverty rate is much higher than in salaried households, demonstrating that the gap between public sector employment and the self-employed Being your own boss makes the risk of exclusion much higher.
This difference is largely explained by the income volatilitySalaried employees have a fixed salary that allows them to plan, while self-employed individuals depend entirely on market demand. Furthermore, access to social protection It is much more restrictive for the self-employed worker, who has fewer safety nets in case of crisis.
The mirage of entrepreneurship and public aid
A critical point is the role of government. Policies promoting self-employment, especially the flat rate and other initial incentivesThese measures have ultimately skewed the unemployment figures. Instead of promoting viable businesses, they have encouraged thousands of people to register without a real business plan, creating a entrepreneurship bubble which has inevitably erupted.
The result is that over 60% of those who take advantage of these subsidies end up declaring extremely low returns. As Eduardo Abad, president of UPTA, states, this is happening subsidizing poverty instead of consolidating productive activities. This condemns workers to go into debt to sustain unprofitable businesses, turning the RETA into a tailor's drawer where real projects coexist with subsistence situations.
To solve this, it is proposed that the Public Employment Service facilitate a A dignified exit from self-employmentIt's not about ceasing to support entrepreneurship, but about recognizing when a project is not viable and offering professional retraining programs so that these people can reintegrate into the labor market salaried employee commensurate with their experience.
Structural factors that undermine small entrepreneurs
Poverty among the self-employed is not an accident, but rather a response to a series of systemic tensions. Firstly, high fixed costs They are an unbearable burden. The fact of having to pay a fixed Social Security contribution, regardless of income, hits those earning less than 600 euros per month particularly hard. This tax rigidity It penalizes the survival of nascent projects.
In addition, there are other factors that complicate profitability:
- Unfair competition and prices: Freelancers must compete with large platforms and companies that apply economies of scale, which drastically reduces their profit margins.
- Funding difficulty: Access to external capital is very limited, which prevents investment in marketing or innovation to scale the business.
- Low productivity: Many are concentrated in saturated sectors (transport, retail) where added value is low and continuing education is scarce.
This situation creates a vicious cycle. lack of capacity to cushion shocks Economic factors mean that any price increase or drop in demand could lead to the immediate closure of the business. At a macroeconomic level, this reduces domestic consumption and... effective tax contributionbecause even though high quotas are required, the income tax revenue from these profiles is minimal.
To reverse this trend, measures are being considered such as adjusting the self-employed contribution to the real income, reduce the bureaucratic burden that consumes productive time and promote tax incentives for those activities that actually generate High value added and digitization. Only by creating an ecosystem where the cost of maintaining the activity is proportional to the success of the business can self-employment be prevented from becoming a poverty trap.
The precarious situation of nearly one million self-employed workers demonstrates that the current model for promoting entrepreneurship in Spain has largely failed. The solution lies in differentiating between genuine and sustainable entrepreneurship and that which is used to mask unemployment, ensuring that tax burdens should be fair and that there are real pathways for professional retraining for those who fail to prosper, thus preventing the freedom to be one's own boss from becoming an economic burden.