Spain´s unemployment rate hit the highest levels in the last 15 years, and reached nearly 4 million people without a job. The increase only for December 2009 is of almost 55,000 people which is, alone, 1,4% growth with regards to the month of November, regardless of the efforts of the current Socialist Prime Minister, Jose Luis Rodriguez Zapatero. This makes 2009, the year with the highest unemployment levels since at least 1997, according to the Labour Ministry. Furthermore, there is a dramatic increase of the temporary contracts, while before they were 60%, now every 9 out of 10 contracts is temporary.
The situation in Spain seems to be among the most preoccupying in Europe. Almost 20% of the workforce has no job (the Euro-average is 9,8%). Those for whom it is worse are the young people, recent graduates, who come out of University with little to no professional experience. In this sector, Spain´s results are worse even then those of Eastern Europe. This has become known as the ¨Lost Generation¨, 42,9% of the people between the ages of 16 and 24 are unemployed, the highest rate in Europe and more then double the overall value.
Spain has traditionally had a relatively higher level of unemployment, yet the sharp increase among young people is particularly problematic. It has jumped from 17.5 % three years ago at the height of the boom to the current 42.9 %. At this level, Spain stands out from other troubled European countries. In Greece, for example, the youth unemployment rate is 25 percent, while Ireland’s is 28.4 percent and Italy’s is 26.9 percent.
Spain is the extreme, but the experience of younger workers here reflects similar problems in the United States, as well as other European countries still struggling to emerge from the recession. That is because the sectors that employ young people in the greatest numbers — fast food, construction, retail — are expected to take the longest to recover. Especially with the construction sector still shedding jobs after the collapse of the housing market, economists expect the number of unemployed to keep rising this year.
However, there is a light in the end of the tunnel. What is crucial for the young and unemployed is to try to improve their academic skills so that they can be more competitive on the job market. Although it is true that all are suffering from the diminishing employment opportunities, the profiles of people with little academic skills and professional knowledge are at the highest risk.
For example, Rebecca Wilder states: ¨The rise in Spain’s unemployment rate for young workers 15-24 is great, +32.0% since January 2009; but that in Ireland (52.7%), the Czech Republic (47.1%), Denmark (37.9%), Bulgaria (32.8%), and Slovakia (32.2%) are larger in magnitude. Across Europe, younger workers are being forced into unemployment – or schooling, which is common for this cohort.¨
According to the OECD (in the 2009 Economic Outlook No. 86), Spain’s labor market problems have likely peaked, while those in other parts of Europe are only getting started (like that in Germany, which could rise significantly in 2010):
the largest part of the total expected increase in unemployment in Spain has already taken place, while in other European countries significant further increase in unemployment is expected going forward.
The Baltic States are taking a beating, Latvia’s unemployment rate was already 20.9% in October. And since the Baltic economies are expected to drop (see the European Commission’s autumn forecast) the most in 2009 and 2010, a lagged indicator like the unemployment rate is bound to rise further.