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Holiday hiring helps, but Spanish job scene remains grim


Holiday hiring helps, but Spanish job scene remains grim


The latest official figures show almost five million people registered as unemployed in Spain in April.

The number of Spaniards looking for work did fall by 46,000 from the previous month, but that was mostly due to restaurants and hotels hiring for the holiday season.

Adjusted to take into account such seasonal factors as tourism industry work, the total went up in the month.

One young woman outside a Madrid job centre said: “It’s very bad. I’m trained as a social worker but there’s no work, that’s an area where there have been lots of cuts. I’d take any work, even if it was just for two or three months.”

But the real situation is much worse than the Labour Ministry statistics imply.

Official surveys showed 6.2 million people without a job in the first three months of the year. That is 27.16 percent of the workforce

The almost five million total is just those who are on the books of job centres, it does not include the long-term unemployed who no longer register as out of work.

Spain’s jobless rate is the second highest in Europe behind Greece. It has risen every quarter since mid-2011. The youth unemployment rate in Spain is now at 56.5 percent, again second only to Greece.

April’s figures reveal the biggest falls in registered unemployed were in the services sector and in construction, from which millions have already lost their jobs after the property bubble burst in 2008.

But a survey this week showed that Spain’s services sector shrank in April at its fastest rate this year, with employment conditions worsening every month since March 2008.

The government expects the unemployment rate to remain above 24 percent until 2016.

Spain has been in recession for almost four years now. The economy contracted at a slower pace of 0.5 percent quarter-on-quarter in the first quarter than 0.8 percent in the fourth quarter. The negative growth was driven mainly by weak domestic demand.

Job crisis

Europe’s policymakers are starting to recognise chronic unemployment as a crisis in its own right, rather than something that will resolve itself when the economy improves.

As the European Commission’s spring economic forecast was released UE Economic and Monetary Affairs Commissioner Olli Rehn said it would do “whatever it takes” to overcome the jobless crisis. That was a phrase borrowed from European Central Bank President Mario Draghi’s pledge to protect the euro.

In previous forecasts, Rehn mentioned reducing unemployment mainly as something that would only come further down the line, after the completion of painful reforms.

Jobs data from across the Atlantic, released on Friday, contrasted starkly. The United States added 165,000 non-farm jobs in April, while the unemployment rate there fell to 7.6 percent, its lowest since December 2008.

In the eurozone the jobless rate hit a new record 12.1 percent in March, meaning more than 19 million people are out of work.

No quick fix

Even if Europe’s politicians do see joblessness as a crisis that must be fought actively, there is little that could spur a quick change in fortunes.

“There are always measures which the authorities can take to get the labour market going,” said Philip Shaw, chief economist at Investec in London.

“The problem is, given the depth of the crisis, they’re unlikely to make a material, positive impact for quite some time. There is absolutely no quick fix to the problem.”

US Treasury Secretary Jack Lew recently said a rush towards fiscal austerity in Europe had worsened the economic situation in some countries, arguing that there is a need to assess the impact of budget cuts on growth and employment.

He and his G7 finance minister counterparts meet on Friday in London, and although the agenda focuses on fighting tax evasion, the event will provide another chance to discuss how Europe can return to prosperity.

Ultimately, the solution lies in the structural reforms that are already slowly taking place, and also in the restoration of Europe’s banking system.

Shaw cited the fact US banks recapitalised earlier than those in Europe, particularly in the eurozone, as one of many reasons why the American economy has performed better, therefore creating more jobs.

“(US) unemployment peaked in double digits back in 2009. Looking at a snapshot now, the US seems to have less of an unemployment issue than continental Europe,” said Shaw.

“However, that hides the fact it’s been a long, hard grind getting the jobless rate down in the US.”

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