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.
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.
¶
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.