Why is unemployment so high in Spain?
 

Spain's economy seems to be going great guns. For 2025 The Economist estimates GDP growth of 2.6%, the highest in the Euro area, and a positive current account (difference between exports and imports) of 2.3% of GDP i.e. a surplus.

Yet it also reports that the unemployment rate is 10.8%.

Why is this? The two seem incompatible. We'll all have our opinions but does anyone know?

Re: Why is unemployment so high in Spain?
 

There are many reasons that may, or often do apply in part.

Economic growth is not directly correlated with increased employment, and typically lags economic growth - employers may have retained employees that they could/ would have layed-off but weren't fully occupied, so the business can increase production/ services without additional hiring. Ditto paid overtime - in the short term employers have existing employees work more hours to increase production.

Similar to above, employers may expand production by improving technology, rather than adding employees - farmers may buy larger equipment, retailers add self-scan rather than adding sales assistants, manufacturers adding robot/ automated equipment, _etc._

Who is allowed to register as unemployed is an inherently political decision, and may, or may not be linked to payment of unemployment benefits, and those people may, or maybe not be actually seeking and willing to accept a job if offered.

So, given the above, some new hires might be people who were not included in the unemployment figures, for example people taking part time work when already retired, or mothers with children taking part time work who were not included in the unemployment figures.

If the jobs being added required specific qualifications and skills, then within the EUs freedom of movement area, people taking those jobs may have moved into Spain to take those jobs. Conversely, unskilled, low paid work might attract people from elsewhere in the EU because existing residents might be unwilling to perform that job at the offered pay level. A common example of this is seasonal agricultural labour.

And these are just some of the reasons off the top of my head, there may be more.

Re: Why is unemployment so high in Spain?
 

Pulaski, just what I was looking for. "existing residents might be unwilling to perform that job at the offered pay level" instead of "because the young are too lazy", very good.

Given that your reply suggests reasons why the unemployment rate hasn't (yet) come down, perhaps a related question would be "why has Spain's unemployment rate been so high?" i.e. what put it above other European countries' in the first place.

Re: Why is unemployment so high in Spain?
 

I think I read somewhere (a long time ago) that Spain produces many overqualified people (parents are keen that their children get a good education, as maybe they didn't have the opportunity) and I know a friend of mine's daughter has a doctorate but only works in a basic job.

Many of course move abroad, but many stay close to family, but cannot find suitable employment to match their skills.

Re: Why is unemployment so high in Spain?
 

From what I read about Spain's economic woes over the past 17 years, since the economic meltdown of the great recession of 2008-2010, the exceptionally high unemployment figures were substantially driven by unemployment of school leavers and people under 25 - I saw estimates of youth unemployment in Spain approaching 50% during the post-great recession years and during the covid period

You may know more about this than I do, but I understand that several issues may have caused that, including [1] poor access to post-secondary education (degrees and vocational training), and [2] reduced access to work outside of Spain (I believe that Spain, like Ireland is a country with a history of many young people leaving to work overseas), leading to more young people remaining in Spain. This could be due to various factors including [1] reduced hiring in overseas markets, [2] competition for those jobs e.g. from young workers from other EU countries such as Poland, Slovakia, Hungary, Romania and Bulgaria, and also [3] due to competition from external immigrants into the EU, notably and notoriously from Syria during the Civil War there.

Also Brexit greatly reduced opportunities to move to and work to the UK which historically had been one of the larger destinations for young Spaniards.

And conversely, direct migration into Spain, including refugees, illegal migrants, notably from Africa, and from the many countries in Latin America that Spain still has close cultural ties with, have led to increased competition for low-skill/ labouring work in Spain.

Re: Why is unemployment so high in Spain?
 

There's definitely something to this as where I live it's hard for locals to break through certain income thresholds. It seems that even if you're a qualified accountant you still earn little more than a regular office clerk. It's like there's this invisible ceiling that's hard to breach unless you set up a business of your own.

Is Spain really a market for workers from elsewhere in the EU? Those I know are earning loads in places like Germany, Austria, Switzerland or Norway and it would be quite difficult to tempt them to move to Spain due to lower wages. Virtually everyone I know is working remotely from Spain, rather than moving to Spain... for a job.

Latin America is another matter. I don't know what the visa situation is but could they be allowed to bypass the general legal basis of jobs in the EU being prioritised for Spaniards/EU nationals?

Last but not least, what is the black market like when it comes to labour? Lots of countries have a small to large percentage of jobs that aren't registered even though people are actually working (off the books)...

Re: Why is unemployment so high in Spain?
 

Not huge numbers, but it's part of the overall employment picture - for specialist skills, such as engineers and medical professionals.
I don't recall the prescise details, but Spain has long-standing ties to many (most?) Spanish-speaking countries in Latin America, that allow (IIRC) young people to come to Spain on something similar to Canada and Australia's "working holiday visa", and having estabished an address and a job, apply for Spanish citizenship.

Re: Why is unemployment so high in Spain?
 

They often come to Spain having already got Spanish or Italian nationality due to parents or grandparents.

It's less than it was thanks to more effective work inspections but still more than it should be.

There was also the thing where people had social security payments retained on their payslip but that money wasn't forwarded to social security, they were actually working under the table without knowing it (until too late). That's also less than it was thanks to more online form-filling for companies and people getting a SMS message from social security when they officially start a job.

Re: Why is unemployment so high in Spain?
 

Spain was severely handicapped during Franco's reign. It basically stagnated as the country simply stuck to a agricultural economic model will little attempt to modernise. During the 70s Franco recognised Tourism as a lucrative low cost industry. Low cost industries appeal to countries restricted by things like totalitarian governments. They order their hierarchies based on corruption and nepotism not meritocracy so this favours people with little experience, knowledge or skill to sit at the top. Consequently little of any real imagination was considered and government didn't care about poverty. The upshot was that after Franco Spain was poorly modernised with no real 20th Century industries. There was no technological research, little high level education, no real training. This has meant that Spain lags far behind most European countries in so many areas. They simply don't have enough high level jobs in areas that interest foreign investment nor a reputation to encourage it. The vestiges of favouritism remain and corruption is still evident in many areas of life. All this is what has contributed to poor employment figures especially with young educated persons. There simply aren't jobs that require their skills. The socialist government have done a lot to try and pull Spain in line with more progressive countries like Scandanavia Germany etc but Spain is so easily seduced into believing the status quo is the safest option that the electorate is appearing to slide back now to the right and the belief that nostalgia for the old days is better for them.

Re: Why is unemployment so high in Spain?
 

I don't want to wax lyrical about Franco, but it's wrong to say that he didn't care about poverty, even it it was self-interest. That's why he industrialised and grew the economy, mandated that VPO (social housing) and comedores sociales be built, passed the law which made restaurants offer menús del día, improved healthcare...

They improved education and training in the 1980s and it's currently a leader in healthcare, pharma, civil engineering, construction, and agriculture and it's the fourth largest market in the eurozone. Youth unemployment problems are shared with other med countries, it's not a uniquely Spanish phenomenon, but their education system recognises that not everybody can go to university and includes vocational training, apprenticeships, and work experience.

That's happening in a lot of places, but I don't think there'll be a Spexit in spite of what Vox wants and I don't think Vox's promise to deport 8 million immigrants will get them very far in Spain either. There's more chance of the UK voting Reform to be honest.

Re: Why is unemployment so high in Spain?
 

Thanks for all the comments, really interesting. "You may know more about this than I do" - no not at all. I'm following along but other than a dusty economics a-level I know nuthing.

Re: Why is unemployment so high in Spain?
 

We shouldn't forget that Spain does something very right: Spanish people life longer and have more healthy life years than British. Maybe we should stop only looking at economics but also include these factors. Why do Spanish people life longer although their unemployment is high?

Re: Why is unemployment so high in Spain?
 

They live longer only on a statistical level
It doesn't actually mean that they don't suffer illnesses like anyone else etc. Secondly it relates to people who grew up in times when the type of food was very organic and natural and contained all the good ingredients for healthy diet. However, the Spanish diet is slowly becoming more and more similar to other diets in Europe- healthy products like fish is now very expensive in Spain compared to 20 years ago and even stuff like oranges has rocketed in the two decades I have been there. However the main reason the live longer is most likely diet and genetics. A British pensioner moving to Spain will not add any more longevity to their life by just being there . You need to stop drinking, smoking, exercise slot etc but statistically you would only possibly add a few days more to your life but not years. In fact I read that foreigners in Spain actually live shorter lives because statistically a large number who die there do so because they become isolated after partners die or live without any real support from family. Consequently they often fall or have heart attacks and no one is there to get help in time. So unless you grow up in Spain and live a very strict lifestyle ( as people did in the 1940s onwards) you won't really make alot of difference and that difference is equally achievable in UK. If your parents were healthy then genetics is your basic marker - so you are very likely to die around the age they did.

Re: Why is unemployment so high in Spain?
 

I've already lived 7 years longer than my mother did (who waited 2 years for surgery for an aortic aneurysm on the NHS, spent 3 weeks in ICU then was moved to an ordinary ward and fell in the hospital because no-one had time to help her get to the toilet and fractured her hip, they x rayed it, said it wasn't broken and made her carry on doing physiotherapy when she complained she was in agony, only when I complained did they do a scan and discovered a fracture), 8 years longer than my paternal grandmother did and many years longer than my maternal grandmother did (she died in her 30s from TB when my mother was only 8). Unbeknownst to me, when I moved to Spain I already had a heart valve problem which had never been detected when I lived in the UK, it had already reached the moderate/severe stage when it was diagnosed here. After having successful surgery, a couple of years later I had a silent heart attack and had a whole battery of tests after that was detected at a routine checkup. No problems with my coronary arteries so I didn't need any stents. I still have regular cardiology checkups, at the latest one last week they found that my heart was slightly more enlarged than at the last one so I was prescribed two more types of medication which help to slow the progression of cardiac insufficiency - I still have no symptoms of heart failure. I know from people in the UK who have the same condition that once coronary artery problems had been ruled out, and in the absence of symptoms, if I still lived there I would have been told just to see my GP if I experienced any symptoms, I would not be continuing to get regular appointments with a cardiologist. Same when I had endometrial cancer, it was caught at a very early stage and I only needed surgery, no chemo or radiotherapy. But I had checkups every six months for the first 3 years post surgery (face to face ones with ultrasound scans) and two more annual ones to take me up to the 5 years clear mark. In the UK, with that type and grade of cancer I would have been put on the "self referral" path after only one post surgery follow-up, ie contact us if you experience any symptoms.

My husband suffered from pain in his knees from arthritis in wet and cold weather when we lived in the UK, although he was only 57 when we left. He does not have that problem here, is now 75 and not on any type of medication.

I have a lot more confidence in the Spanish healthcare system to look after us going forward than I would in the NHS. My town is starting a new palliative care initiative in October and nearly 200 of their domiciliary care workers are being trained to deliver this care in people's own homes, which I welcome.

Re: Why is unemployment so high in Spain?
 

Individual experiences are fine but don't equate to the bigger picture or rather the initial assumption that Spain' poor employment rate can be balanced against it longevity rate.
My son's neighbour in Spain is an English gentleman. He had a bunion on his foot. His doctor gave him antibiotics. Within a month or so it has become greatly affected and , unbelievably they had to amputate the leg. I am being perfectly serious! The neighbours in the building were so angry blaming it totally on the ineptitude of the doctor they are now assisting the family in bringing a court action against Valencia health service. I very much that would have happened in UK but again this is also probably an example of how lacking support and having family etc makes foreigners actually more vulnerable in Spain than UK.
On the other side. I registered here in Scotland with my GP within a few days ( all done online so no need to go anywhere ) and was given an appointment to get a check up ( didn't ask for it) . Nice doctor who simply wanted to know what meds I'm on. Took my BP and told me I take readings and send results every few months via app and they automatically track everything. Had bloods taken too. So pretty good. Less stressful as all in English obviously. So at the moment I haven't encountered the terrible NHS monster I have been told exists.
The other weird thing ( slightly off topic) is the first thing on Sky news this morning was a story of Britain's most wanted criminal called Kevin Parle - there I am eating breakfast when I hear the word " Torrevieja" and hear them talking about how he was seen there and was believed to be shielded by UK organized crime gangs that hide our there. I checked up online and found the small urbanisation is opposite my son's old school bus stop! Weird coincidence.