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An unsolvable paradox? Why Spain breaks job market records but tops EU’s unemployment

Is Spain ‘doomed’ to unemployment? Although its job market has been breaking new records with the number of unemployed at a 15-year low, it still tops EU’s unemployment rate.

After being unhappy with his job for months, Francisco Gómez, 36, received a letter of dismissal.

He had been working in Barcelona as a lawyer since 2018. Gómez had asked for a promotion that stalled due to a change in management.

He did not agree with the company’s new policy and in April, on return from sick leave, they decided to fire him.

That was the first time he found himself unemployed and since then he has been trying to find a new job.

Although Spain’s job market has been breaking new records during the last months with the number of unemployed at a 15-year low, the country continues to lead European unemployment.

The figures registered in the southern European country are outstanding, exceeding the 21-million worker mark for the first time, according to data published by the Ministry of Inclusion last week.

Even so, Spain’s 11.6% unemployment rate is far from the average for the eurozone, which stands at 6.4%, and for the 27 EU countries, which is 5.9%.

These numbers make it more difficult for those seeking to re-enter the labour market, like Francisco Gómez’s, who has been looking for work for four months and still hasn’t been able to find a job, even though he remains optimistic.

“At the beginning it was very hard, I would get up and try to get my spirits back up. I even doubted the company and my own abilities. But now I feel more optimistic,” he tells Euronews.

“I am aware that there are people who may be worse off than I am. I don’t have a family, nor children, so I do not have that financial burden,” he adds.

What is the Spanish paradox?

The number of unemployed in Spain has not been this low since August 2008, according to Eurostat.

However, the number of long-term unemployed stands at 6.2%, an increase of one point compared to 2020, as can be seen in the latest data published by the National Institute of Statistics.

“Looking for a job takes time. Companies are paying low salaries compared to the responsibilities they demand and paying rent in big cities like Madrid or Barcelona is very expensive. This makes it difficult,” says Gómez.

The Spanish paradox stands out when having a look at the data available at European level: it leads the EU in terms of employment growth, but also tops the league table for the number of unemployed.

“This is basically because Spain’s unemployment rate was way higher. Just six years ago, the gap between Spain and other European countries was colossal. This has been gradually narrowing,” explains Raymond Torres, Director of International Economics at Funcas, a Spanish think tank.

For the expert, the data shows steps in the right direction.

“For the last 40 years, when the Spanish economy weakened, unemployment soared. It is true that in the recovery period, more jobs were created than in other European countries, but on average, there was more unemployment in Spain”.

Is Spain ‘doomed’ to unemployment?

As Spain continues to struggle to move down the rankings, many are wondering whether unemployment will always be its great burden.

At the moment, Spain has more unemployment than Greece (11.1%), Sweden (7.9%) or Lithuania (7.5%) and is far behind countries whose statistics show the best data, such as Malta (2.6%), Poland (2.6%) or even the Netherlands (3.5%).

“I don’t think there is a specific curse, or that Spain is doomed to such high unemployment all the time,” Torres says.

He argues measures such as the country’s 2021 labour reform, introduced to put an end to job instability and temporary employment, would help to converge towards data like that of its European neighbours.

The latest labour reform was a gamble by the Socialist government. And it paid off.

Only a year after its entry into force, the number of temporary contracts fell by 30% and the measure boosted permanent employment.

However, Torres believes Spain still has work to do. Its two main challenges lie in active policies, such as the outplacement system for the unemployed, and the high rate of youth unemployment.

“France had the same problem as Spain in terms of bringing the unemployed back to the labour market and, through reforms, unemployment has gradually been reduced”, he points out.

Spain is also the country with the highest number of under-25s without a job (27.4%), ahead of Sweden (24.9%) and Greece (23.6%).

“This is something that is still not working well in the country. The education system is not sufficiently intertwined with the labour market. Moreover, Spain still has a much higher drop-out rate than northern European countries such as Germany,” says Torres.

Source : euronews