Causes of unemployment in Spain
The labor market in Spain has reached its peak following the four-year crisis that that country has undergone.
This situation has been signified by the high unemployment rates that have been witnessed in the country. Currently, the rate of unemployment in Spain stands at 24.8% (The Guardian, 2013).
By undertaking an analysis of the international and national level, it is evident that the situation in Spain is bound to accelerate in years to come. Most of the 25 year olds in the country are currently unemployed.
Currently, the level of unemployment among the youth in Spain is projected at 53% (BBC News, 2012). Young adults have also been affected by this crisis as 31% of them are without any gainful employment (BBC News, 2013).
Spain started experiencing the evolution of unemployment way back in the early 2000s. However, the unemployment patterns of the country were comparable to the ones recorded in the other European Union member countries.
This was the case even though the annual level of unemployment in Spain was by far greater when compared with the countries in the European Union. This can be attributed to the economic crisis that hit the global sphere since the beginnings of 2008.
By analyzing the unemployment rates in Spain, we can then deduce that the rates of unemployment among the age groups of between16 and 24 years are higher, in comparison with that of the general adult population in the country (Abellán & Mars, 2013).
On the other hand, there was a significant drop in the ratio of unemployment among the aforementioned group between 2008 and 2012 in tandem with the improved economic conditions across the globe (BBC News, 2013).
The decline in the ratios among the youth and the adults can also be observed in other countries in the European Union.
One of the major contributors to this trend is that the labor market in Spain has evolved over the years and more so following the onset of the economic crisis, thereby causing a decline in the rate of unemployment among the youth.
At the same time, the rate of unemployment among the adults in Spain increased (Allard, 2012).
Through thorough analysis, it can further be deduced that the 25 to 29 age groups is characterized by lower rates of unemployment which has grown after the economic crises mainly due to the labor productivity factor that is attributed to this age group (The Huffington Post, 2012).
It should however be noted that although the economic crisis was a global phenomenon (BBC News, 2012), Spain was largely affected since the crisis had a huge influence on the economic cycle of the country, with the young people in the country affected the most.
In order to further identify the root cause of the problem of the high levels of unemployment in Spain, it is necessary to evaluate the evolution of the unemployment among the youth in the country, in terms of the economic crisis that occurred between 2008 and 2012.
Between the year 2008 and 2012, there was a decline in employment levels for the youth in the country, with a figurative analysis of about 67 percent which accounts for a majority of the total young people that have lost their jobs since the crisis, with the worst hit being the age groups from 16 to 24 years (BBC News 2013).
By conducting an in-depth analysis of the aforementioned factors, it emerges that the most vulnerable group to the economic crisis were the youths as a result of several factors.
To start with, most of the notable trends lie in the job characteristics that were undertaken by the youth during the expansion period that took place in Spanish economy from mid 1990s to 2007 (Abellán & Mars, 2013).
On the other hand, most of the employed youths work in areas/industries that have been adversely affected by the economic crisis. Research studies further indicate that majority of the youths in Spain tend to be concentrated in industries like the manufacturing and construction industries.
Other industries where the youths are to be found in large numbers include the retail sector, as well as the manufacturing sector. It is also important to note that the aforementioned sectors account for nearly 66% of the entire jobs held by the youths in Spain in the past global economic crisis (The Guardian, 2013).
By analyzing the issue of unemployment in Spain based on the gender divide, it can be seen that major discrepancies amongst the two genders is evident.
It has been noted that this problem is particularly high among the males since majority of them are employed by the construction industry, accounting for nearly 41% of all jobs in Spain. Between 2008 and 2012, the construction industry in Spain was the worst hit.
In the case of their female counterparts, although most of them lost jobs in the manufacturing sector and in retail sales, nevertheless, they were not as high as their male counterparts (BBC News, 2013).
It should be further noted that most of the young people in the country are also concentrated in occupations that were worst hit by the crisis, with most of them possessing just the bare minimum qualifications. As such, they are not able to switch jobs when there is a crisis in a specific industry.
The four occupations in the country that accounted for the highest unemployment rates during this period are the craft related trades, the service industry, sales jobs, and clerical support workers (The Guardian, 2013).
However, the factor that has posed the highest risk of vulnerability in as far as the youths of the country are concerned is the high degree of precarious works that compose the fundamental basis of the labor markets in the country , and more so for this age groups, which has in turn turned out to be an endemic to them.
Even though the numbers of temporary jobs in the country have remained high, meaning that there have been higher levels of incorporation of the young people into the jobs, the problem of vulnerability still lingers, being that, most of the temporary jobs were also among the worst hit after the crisis.
Consequences of unemployment in the country
While the Spanish government has implemented several measures in order to address the issue of unemployment in the country, little has been done in the way of addressing the problem/damage that has already been caused.
Most of the Spanish youths have therefore been forced to leave the country in search of better jobs elsewhere (The Guardian, 2013).
This youth exodus tends to pose the danger of brain drain, as it is not definite whether the country youths have plans to return back home, once the economy is revived.
Most of those who are not able to leave the country for a better livelihood elsewhere are in danger of also having a dark and clouded future.
In this case, therefore, many of them will be drawn back to contentment and a failure to further develop their careers being that most of the employers in the industry are also seeking to employ persons with experience (The Huffington Post, 2012).
The result of this effect is that, it has led to the brew of movements like the 15-M movement in the country which is mainly aligned to protesting the political and economic situation of the country.
It is also very necessary to note that, despite most of the youths in the country being calm as per now, it is inevitable that the problem will surely result to violent activities and protests in the future.
One of the case studies could be the London riots of 2012 which is also a likely consequence in the Spanish economy, should the future remain so bleak. It is due to the high rates of unemployment that the country has experienced a collapse in the housing boom that later led it to sink deeper into the crisis (BBC News, 2013).
It is now clear that due to the lack of means for survival to supplement their daily needs, many jobless Spanish youths have now resorted to living in their family homes, for a longer period than before, making the average independence age higher, as most of them are forced to stay with their parents even into their thirties (BBC News, 2013).
The resultant consequence of this is that, these youths are now further delaying their advancement into adulthood, as they are scared of leaving home.
Through a report that was also published by the International Labour Organisation (ILO), it has been noted that the resultant consequence of unemployment in the youth of the country, could further lead to dire implications among which are: increased crime rates with other added factors like drug abuse, depression, making them to be more oriented to the violent side, as a result of the disheartening that they tend to face.
Spain is so far, one of the countries that has had to deal with the increased rate of drug use, such as cannabis and cocaine, among the youths (The Guardian, 2013).
It is also further noted that, the revenues for the country have also been drastically reduced, being that they are the most rampant population and the fact that they have no jobs, make it bad for the country.
The fact that they cannot secure well paying jobs to save and accumulate any assets means that, the welfare of the state is deprived as the consequence is that they cannot also afford to pay for the future pensions.
The Spanish government has however, endeavoured to try and resolve the dire situation in the country, with most of the resources being reaped from the European Union (Abellán & Mars 2013).
At the current European union summit that was conducted in Brussels, the president of the European commission urged the leaders of the union to use the 82 billion Euros, in the account to ensure that most of the youth programs among their member states are promoted and that small businesses are facilitated, so as to ensure that the young people have a livelihood.
Most of these suggested reforms are so far what the Spaniard country is basing on to ensure that the situation is addressed.
The government has also acted by reducing the unemployment benefits of those that are not yet employed (Allard 2012). However, emulation of such austerity measures from Greece as currently practised by Spain are in fact not called for in any way.
This is a measure that is totally uncalled for as this will only worsen the situation of those that are jobless in the country (The Guardian, 2013).
The government should however consider establishing safety measures through use of safety nets to ensure that the citizens of the country are in turn protected from harsh realities like economic instability instead of subjecting them to more stringent measures.
It is therefore not necessary that the country implement harsh measures like higher taxes on the people (The Guardian, 2013).
Among some of the measures that the government should in fact implement, are like ensuring that the country’s aggregate levels of demand are boosted, through use of the reflationary fiscal policies.
This could be attained through implementing a reduction in taxes to increase the total spending rates of the nationals, thus leading to growth, which will also consequently increase the demand of the firms for more workers (BBC News, 2012).
Additionally, even though leaving the euro and cutting on the interest rates may seem like a radical suggestion, it could actually work for the country. The main proof is the United Kingdom, which has not been in any way affected by being out of the European Union (BBC News, 2013).
This way, the country could also decide on the amount of interest rates to cut down depending with what is feasible for the country and not just based on what is good for the European Union.
The negative implication of this could be that it could cause inconveniences in regards to fluctuations in the exchange rates and higher transaction costs.
It is also not apparent that lower interest rates could solve the unemployment issue, though this could be one of the steps to help solve the issue.
Reference List
Abellán, L., & Mars, A. (2013). Spain Signs up to EU Plan to Combat Youth Unemployment. Web.
Allard, G. (2012). Spain’s Labor Market Reform Is Radical And Will Be Painful. Web.
BBC News (2012). Eurozone crisis explained. Web.
BBC News. (2013). Spain Unemployment Rate Hit a Record: Youth Rate at 55%. (2013). Web.
BBC News. (2013). Spain’s Population Shrinks as Immigrants Flee Economic Crisis. Web.
The Guardian. (2013). Spain Hasn’t Seen Unemployment This Bad Since Franco. (2013). Web.
The Huffington Post. (2012). Spain’s Financial Crisis Explained: 5 Reasons For Spanish Economic Struggles. Web.