Spain’s Unemployment Threatens Economic Stability

By Ilya Rzhevskiy, Epoch Times
May 2, 2011 Updated: October 1, 2015

Young people hold placards reading 'Without a house, without a job, without pension' during a demonstration to protest against insecurity against high unemployment, job insecurity and government spending cuts, responding to an initiative launched on the Internet, in Spain on April 7.  (Dominique Faget/Getty Images)
Young people hold placards reading 'Without a house, without a job, without pension' during a demonstration to protest against insecurity against high unemployment, job insecurity and government spending cuts, responding to an initiative launched on the Internet, in Spain on April 7. (Dominique Faget/Getty Images)
MUNICH—Unemployment in Spain continues to rise. Last week official statistics reported that the unemployment rate has risen to 21.3 percent, up from 20.3 percent in a previous quarter.

At the moment there are 5 million jobless Spaniards across the country, especially in the southern regions such as Anda Lucia, where unemployment is greater than 25 percent.

Although Spain is still Europe’s fourth largest economy, it is experiencing tremendous challenges and stagnation since the 2008 world economic crisis, which brought the Spanish economy to its knees and threatened a sovereign debt crisis in the European Union.

While Germany and France showed robust economic performance and have moved past the economic crash of two years ago, Spain seems to be unable to pull itself out of stagnating cycles and is spiraling downward, toward a possible debt default.

“We believe that discouraged male job seekers are leaving the labor force, and many first-time entrants are remaining in education or entering the cash economy,” said Raj Badiani, an analyst at IHS Global Insight.

Remaining employed Spanish workers, seemingly with little job security seeing their colleagues getting fired right and left—are actively applying outside the country where the economies are stable—particularly in Germany’s hot market of. This is especially evident among the highly qualified technical workers, many of whom already had succeeded in getting well-paid jobs in Germany where there is currently a lack of technical personnel in the workforce.

It is especially hard for college graduates to find jobs in Spain, as they have little job experience and face competition from unemployed experienced workers.

"It's very hard to find work here, especially something long term," explains Silvia Dominguez, who works as a student nurse in Madrid. She decided to learn German thinking that it will bring her success in her career.

"The German economy is much better," Silvia says. "I'd prefer to stay in Spain with my family and friends, but without work it's impossible."

According to recruitment agency Adecco, during the last two years 110,000 have left the southwestern European country and most of them are highly qualified male workers under 35 years old.

"Our education qualifies us to work in any country," says Ernesto, a senior college student. He says that due to competition, the wages have gone down a lot.

"Going to Germany is a very attractive prospect. You can double your salary there," he added.

The unemployment rate for young adults under 25 is currently at a devastating 40 percent in Spain.

Besides high unemployment, consumer prices have also gone up sharply. Inflation for consumer products rose to 3.8 percent in April. This is in part an effect from higher gas prices driven by conflicts in the Middle East.

The Spanish government expects the situation to improve, saying that there will be more jobs created in the second part of 2011. This expectation is partly based on the fact that tourism lures millions of Europeans to the warm beach resorts of Spain starting in May and ending in October.

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