Is Spain’s unemployment turnaround misleading?

LAST UPDATED: 21 Aug, 2014 @ 09:50
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Is Spain’s unemployment turnaround misleading?

SPAIN’S jobs market is full of optimistic reports about rising employment and falling dole queues but misleading statistics could be cause for unjustified celebration.

Unemployment dropped to below 25% this month for the first time since the crisis. But new statistics reveal that full-time jobs and salaries have also seen a decrease.

The number of full-time employees has fallen from just under 16.6 million at the start of 2012 to 15.8 million now – a total loss of 824,000 full-time jobs – according to data from the Quarterly National Accounts.

The average salary has also dwindled from €15.55 an hour to €15.36 over the past two years.

While an unemployment rate tells you how many people are in and out of work, it says nothing about the total number of hours worked, or salaries.

This information is needed to reveal the true figure of how many full-time jobs have been created, and how the average salary has been affected.

These statistics indicate that jobs have not been created but simply divided, so that while more people are ‘technically’ employed, even more are underemployed.

As the saying goes, there are lies, damned lies and statistics …

 

7 COMMENTS

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  1. In Spain’s service economy, many hotel, restaurant and trade workers are
    really contractors, not employees. They work for cash only. It’s a shadow economy that may skew Spain’s unemployment figures.

    Many of these same workers have second jobs doing odd jobs for expats. Like myself and many others. They are housekeepers, cooks, painters, plumbers, masons, etc.

    This cash only system also allows employers to avoid certain employee taxes and employee responsibilities. It also allows some cash-only employees to keep their government benefits.

  2. @Harry
    What you forgot to add to was not only does it allow some cash-only employees to keep their government benefits BUT at little or no risk of being caught.
    I would love to be a labour inspector in Spain and I would do on commission only, say 100€ per person I caught as I would be very rich very quickly. Just the 5 min walk between my business and my house I would get at least 30 people working cash and that would be without trying.

    The major trick in Spain is to give a person a 5 or 10 hour contract and pay them he rest in cash of course by doing this the employer saves huge amounts of money on social security and it’s cheaper to terminate a contract.

    Before on here I mention a girl I recently employed, she had been working in a busy restaurant in the centre of Fuengirola 6 days a week 9 hours a day, she was paid 3€ an hour (3.50€ approx bellow the min wage for that type of work) her boss gave her no holiday, no holiday pay, no tips and was on a work contract of 2 hours a week. She and another girl were on the same sort of deal and the other 3 member of staff were family who worked on no contract, this is Spain and this reality.

    Black economy is so large here that the only way to change it is a huge re haul of employment laws and social security system which will never happen. If you employ some on a 1150 € contract a month you pay at least 400€ on top of that this way to high and makes staff cost the biggest overhead

  3. You would imagine that if the economy would hit rock bottom, the government would take drastic action in making reforms.

    Well, it has hit bottom, they haven’t made significant reforms and most likely will not.

    But life is good here.

  4. good there well you tell that to the people of la linea de la consepsion or sanroque you will see the answer that you will received one one them would tell you about the 50% unemployment thats how good is live is down there

  5. If the government stops punishing small businesses with stealth taxes and high employment costs things would get better. The small buisness owner should be the life blood of the country supporting local economies by employing locals but by also using other local small buisnesses. Unfortunately here in Spain it is very hard to make a decent living unless you cheat the system which many are forced into doing just to stay afloat.

    Of course a lot of small buisnesses are completely abusing the system getting away with it due to lack of control and badly enforced laws.

    The problem is it is a huge vicious circle with the government not able to make or can afford to make the cuts that would help solve the unemployment problem.

  6. Many people who don’t work are not registered on the ‘paro’. The numbers also fail to recognise part-timers. Spain’s average figure of around 25% unemployed is also skewed between Andalucía’s giant 35% (or more) and the north, where figures are closer to European standards.
    Somebody mentions La Linea, at well over 40% (the province of Cadiz is 42% unemployed). Here’s El País on the spectacularly dirty and miserable town: ‘…But there is an enemy that is feared more than pollution in this Cádiz municipality: unemployment. “If it were not for the industrial estate, or if there were no Gibraltar, where are we going to work?” asks Francisco Jesús Lozano, a local businessman’.

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