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Unemployment in Spain
Economic blog
Economic Blog: Unemployment in Spain
Economic Blog: Unemployment in Spain and its Causes
The continuous weakness of Euro-zone economies has resulted in the rising level of unemployment in European Union. Spain was also hit by disease of unemployment around 15 years back in 1996 and since then it has suffered from highest persistent rate in the European Union for several years. This problem was worsened by the credit crunch and the real estate bubble in 2008, which has created a critical situation in Spain due to continuous rise in the unemployment level.
The main problem behind the disturbed situation of Spain is that the Government of Spain has imposed tough measures in order to reduce its debts; therefore the economy has not been able to create jobs for unemployed till now. The economy of Spain also failed in creating jobs due to the global financial uncertainty, from which even the most successful countries of the world are suffering. In fact Spanish economy has suffered and is suffering the effects of the world recession far more than any other most advanced country.
Currently unemployment in Spain has reached to 21.5% and around 5 million people are jobless which means that Spain has the highest jobless rate among all the industrialized countries (BBC news, 28th October 2011). This rate of unemployment is the highest recorded in Spain after 15 years; earlier it reached 21.6% in third quarter of 1996.
According to the Spain's National Institute of Statistics (INE), the unemployment in third quarter of the year has reached to this highest level of 21.6%, despite having a strong summer tourist season because the temporary contracts have been completed and have come to an end.
Unemployment has also badly hit the youth of Spain with several layoffs of people with ages below 25 years, which has made this problem even more critical. There have been continuous...
According to the European Union data, the current youth unemployment in Spain is 46.2% which is the highest rate in Europe.
Elena Valenciano, the campaign manager for Socialists, pointed out that the economy is slipping back towards recession and Spain is the victims of this turmoil, where families are not able to consume and kick start the economy. Spanish National Radio also pointed out that it is very difficult to create jobs for the unemployed in these circumstances.
The jobless rate of Spain has now almost tripled; compared with the four years back figures, when the global crises started to bite and eat the economies. The rate lowered little bit in the second quarter as companies hired people for the meeting the needs of tourism rush but this relief didn't last longer.
According to a Statistics Report, more than 2000 people stopped looking for jobs during the third quarter of this year. In consequence of which the jobless rate has been recorded much lesser; otherwise the number of people actively looking for jobs would have been bigger resulting in high jobless people rate.
In order to solve the problem of unemployment; it is important to first identify the causes and then choose the right policies. There are several factors which have played an important role in giving rise to this critical situation in Spain.
One factor from these is the activity of Spanish economy, in dealing with a strong exchange rate. Credit Crunch and housing bubble in 2008 also played an active role, as the economy is significantly affected by the boom and bust of the property. In result of which there is a large surplus of unsold property in Spain which has given break to further construction. This way the construction industry which was one of the major employers for the people has now scarce jobs. Furthermore, the…
Sources
Woolls, D. (2011, November 3), Spain unemployment claims in October up by 134,000, Yahoo News, Associated Press., Retrieved Nov 17, 2011,
http://news.yahoo.com/spain-unemployment-claims-october-134-000-083054371.html
2011, October 28. Record unemployment in Spain, BBC News, Retrieved Nov 17, 2011,
http://www.bbc.co.uk/news/business-15497309
http://www.bbc.co.uk/news/business-12958329
2011, http://www.bbc.co.uk/news/world-europe-15176520
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