Having a job does not necessarily mean being able to afford a home. A new report by Oxfam Intermón estimates that housing costs push 16,195 workers in the Balearic Islands below the poverty threshold, highlighting the financial pressure faced by people who struggle to cover rent, mortgage payments and other housing expenses from their earnings.

The study, titled Cuando trabajar no es suficiente: el impacto del coste de la vivienda en la pobreza laboral (“When Work Is Not Enough: The Impact of Housing Costs on In-Work Poverty”), examines how household finances change after housing costs are deducted from income.

According to the report, the estimated in-work poverty rate in the Balearic Islands rises from 6.12% before housing costs to 8.84% afterwards, an increase of 2.72 percentage points.

Oxfam Intermón cautions that the sample used for the Balearic Islands is insufficient to draw firm regional conclusions. The figures should therefore be treated as indicative estimates rather than a definitive measurement of the situation of every working household in the archipelago.

Renters Face the Greatest Housing-Related Pressure

The study identifies people renting homes at market rates as the group most affected by housing costs in the Balearic Islands.

Among these workers, the estimated in-work poverty rate rises from 7.32% before housing costs to 17.31% after rent is taken into account. That represents an increase of 9.99 percentage points.

The report also finds a smaller increase among homeowners who are still paying a mortgage. Their estimated rate rises from 2.64% to 3.26% after housing costs are considered.

For homeowners who have paid off their mortgages, the rate moves in the opposite direction, falling slightly from 7.11% to 6.91%.

These figures illustrate how housing tenure can affect the amount of income households have available after paying for their accommodation. However, the regional sample limitation means the Balearic results should be interpreted cautiously.

Why Working Does Not Always Prevent Poverty

The report examines poverty among people who are employed but whose household income falls below the poverty threshold once housing costs are taken into account.

The analysis considers housing expenses including rent, mortgage payments and property-related taxes. It then recalculates household income after these costs to assess how much money remains available to cover other essential needs.

This approach highlights a problem that conventional income measures can overlook: two households with similar earnings may have very different financial circumstances depending on how much they must spend on housing.

For workers paying high rents, the remaining income may be insufficient to cover food, transport, utilities, healthcare and other everyday expenses.

The findings also underline the importance of considering employment and housing together when examining economic vulnerability. Having a job remains important, but earnings alone do not show how much money a household can actually retain after meeting its essential housing costs.

Nearly Three Million Workers in Poverty Across Spain After Housing Costs

The report estimates that housing expenses push an additional 770,000 workers in Spain below the poverty threshold.

Before housing costs are deducted, approximately 2.2 million workers nationwide are estimated to be living in poverty, equivalent to 11.48% of employed people.

After housing costs are taken into account, the estimated number approaches three million, and the national in-work poverty rate rises to 15.49%.

Oxfam Intermón says the findings demonstrate that employment alone does not guarantee financial security when housing absorbs a substantial share of household income.

The national figures also show that the impact differs significantly according to housing circumstances. People renting at market rates face a particularly high risk of falling below the poverty threshold after paying for their accommodation.

Housing Affordability Remains a Key Issue for the Balearic Islands

The findings add to ongoing concerns about the relationship between housing affordability, wages and living costs in the Balearic Islands.

For residents working in Ibiza and elsewhere in the archipelago, the ability to find and maintain affordable accommodation remains closely connected to financial stability. The report's regional estimates suggest that housing expenses can push some working households below the poverty threshold, although Oxfam Intermón stresses that the Balearic sample is too limited for definitive conclusions.

The study's broader message is that assessing living standards requires looking beyond employment and headline income figures. The amount left after paying for a home can make a substantial difference to whether a working household can cover its other basic needs.

The challenge highlighted by the report is not simply having a job, but ensuring that earnings are sufficient to support a decent standard of living after essential housing expenses have been paid.