Salvatore Capasso, Giovanni Canitano (a cura di)
Mediterranean Economies 2023
DOI: 10.1401/9788815411167/c10
In this section, we present the results emerging from the comparison of urban and economic indicators, selected to investigate
{p. 346}the sustainability path of Mediterranean cities and illustrated in previous sections, between 2021 and 2022.
First, we analyse the indicators which describe the affordability of living costs in terms of the average wage, for citizens, setting a threshold at 100 when all the average wage is spent on the various urban costs we consider. Figure 3 shows the values for rental house affordability for 2021 and 2022. The ratio of rental costs for a one-room apartment, both in the city centre and outside, to the average wage reveals that in some cities of the sample, such as Alexandria, Barcelona, Beirut, Istanbul, Marseille and Tel-Aviv Yafo, the 2022 Russian-Ukrainian conflict has worsened, on average, the housing affordability condition compared to that of the previous year.
The situation is especially worrisome for Beirut and Istanbul where the monthly wage does not cover the cost of renting a one-room apartment. It is also true that the housing affordability index was already increasing from 2019 in these cities albeit at a slow rate (fig. 9 in the appendix). On the other hand, Alexandria and Barcelona show smaller increases in the index but it looks as if the Russian-Ukrainian conflict is responsible for a change in the trend, since from 2019 to 2021 the housing affordability index decreased (fig. 9 in the appendix). However, an improvement is recorded for the last year in the cities of Algiers, Casablanca and Naples. The city of Athens has experienced a slight average decrease in the ratio of the rental cost of a city centre apartment to wages in 2022, although it seems that for a flat outside the city there has been a slight improvement in its affordability with respect to 2021. In Beirut, the average salary was unable to cover the average monthly rent for an apartment in and outside the city centre, especially in 2022.
Regarding the living costs to the monthly wage ratio, i.e. average housing basic bills (electricity, heating, cooling, water, refuse collection) as well as transport expenses to the average wage ratio indicator (fig. 4), there is little change in the results of the analysis done with the renting affordability indicator [5]
. Only {p. 347}Athens appears to perform differently, with the living costs to the monthly wage ratio showing, in this case, a worsening of the situation from 2021 to 2022.
Fig. 3. Rent affordability.
Source: authors’ elaboration.
However, if expenses are considered separately from rental costs, there has emerged a worsening in the affordability of such housing costs over the past year for almost all the sample cities, namely Alexandria, Athens, Barcelona, Beirut, Istanbul, Naples and Tel-Aviv Yafo, while in Algiers and Casablanca there has been a slight improvement. Analysing transportation costs, it may be noted that, except for Istanbul, the current war does not seem to have dumped its economic cost on local transport prices of the Mediterranean cities. Such results may be affected by the fact that only public transport is being analysed. Assessment of the ability of average wages to allow citizens to afford basic living costs is severely compromised in the case of Beirut and Istanbul, since monthly salary is not enough to cover basic costs. We should also note that the situation is also quite difficult in cities such as Alexandria, Athens, Algiers and Casablanca where 70 per cent or more of monthly salaries goes on basic utilities, i.e. the amount remaining for other expenses such as clothes {p. 348}or emergencies is small and is almost impossible to save. The only cities where more than 50 per cent is available after basic expenditure are Marseille and Naples.
The statutory minimum wage can be a helpful tool to foster social sustainability in Mediterranean cities by providing a minimum wage threshold to live worthy. We introduce the minimum wage (established at national level) to the average monthly wage ratio, the so-called Kaitz index: a value that is close to 100, i.e. minimum wage lying close to the monthly wage, could be unsustainable in the long run as it can be a sign of lower productivity, thereby reducing the possibilities that people may afford extra expenses. We calculate also the average living to minimum wage ratio. As we can observe in figure 5 (panel below), the national minimum wage is able to cover basic costs of living only in Athens, Barcelona, Marseille and Split: this is consistent with the previous evidence (fig. 4), for which these cities are able to save a bit with the monthly wage after paying basic bills. In 2022, the indicator worsened its upward trend in Algiers, Casablanca, Istanbul, Tel Aviv-Yafo, Tirana and Tunis (fig. 5). One of the clearest consequences of the Russian-Ukrainian {p. 349}conflict at international level has been the increase of the energy prices, that tend to transfer to households’ basic utilities due to the use of heating or air conditioning and other basic products’ purchase. We analyze the growth rate of the gasoline price to have a better understanding of the effects of Russian-Ukrainian conflict on the Mediterranean cities.
Fig. 4. Average living costs to the monthly wage ratio.
Source: authors’ elaboration.
Fig. 5a. Kaitz index.
Source: authors’ elaboration.
Fig. 5b. Average living costs to minimum wage.
Source: authors’ elaboration.
Figure 6 shows the growth rate of the gasoline price in nominal and real terms, i.e. deflated by the national consumer price index (base year: 2010=100; source: ILOSTAT), in the sample cities, during the years of 2021 and 2022. We take in account the growth rate of the gasoline also in real terms to detect if the gasoline prices have grown more than the average pricing that households pay for goods and services. In the year of 2022, gasoline prices have growth quite a bit in most of the cities of the Mediterranean area, both in nominal as well as real terms, with the exception of Alexandria where have decreased. However, gasoline prices in Beirut and Split have experienced a growth in nominal terms (but less than in 2021) and a decrease in real terms. In the last year, Tunisi has undergone a slight increase in the price of gasoline in nominal terms and a change close to 0% in real terms, compared to the previous period. These mixed evidences allow us to consider that energy (gasoline) could be not the main driver of the inflation in these cities.
Regarding the indicators chosen as proxies for sustainable urban development (Pollution Index and Crime Index), the delta registered between 2021 and 2022 data is not as significant as that observed for economic sustainability. This is due to the fact that environmental and social consequences of such phenomena need more time to manifest themselves, and thus be registered, than economic effects which are, instead, almost immediate. Hence, there is no significant variation in the Pollution Index within the timeframe considered. The only cities that recorded a more noteworthy variation were Athens, Barcelona and Tirana, with a reduction in the Pollution Index.
Importantly, these three cities belong to the European context which, unlike the other regions considered in this study, can be considered the most active towards achieving SDG11. The other cities where pollution decreased after the outbreak of the conflict are Alexandria, Algiers, Marseille, Naples and Tel Aviv, while Beirut, Casablanca, Istanbul, Split and Tunis experienced a slight
{p. 351}increase. As regards the Crime Index, the whole sample of cities recorded an increase, albeit slight, with the most noticeable increase in Tirana. This may testify to the fact that environmental protection and energy saving policies do not always go hand in hand with strategies that intervene in the social sphere. In any case, it should be borne in mind that the data on crime trends can also be complicated by the interplay between different kinds of crime and the perception of users providing data.
Note
[5] We do not expect the relative position to change in most countries with the living costs to the monthly wage relative to the housing affordability indicator since rent is one of the highest expenses in the month, and hence is driving the results of the indicator.