Spain's recovery
Not doing the job
As
Spanish unemployment ticks up again, many workers are sinking into poverty
“THEY are good figures, we
should celebrate,” said Mariano Rajoy, Spain’s prime minister, after data
released on April 23rd showed the country’s recovering
economy had created close to half a million jobs over
the past year. Many Spaniards were feeling less than festive. Since the euro
crisis hit in 2010, Spain’s astronomical unemployment rates have vied with
Greece's for first place in Europe; they have fallen from a high of 27% in
2013, but slowly. Indeed, the unemployment rate increased slightly in the first
quarter, to 23.8%. And in the working-class Madrid neighbourhood of Vallecas
the figures did nothing to lift the gloom.
“Without the money my father
gives us from his pension we would be lost,” says Elsa Carmona, a 39-year-old
mother of two. “That's how it is for many families—six people living off one
person's income.” Her husband, a former construction welder, recently found a
job gardening for nine hours a week, but it does not cover their €800
($867) per month mortgage. Like many of their neighbours in this, one of
the Spanish capital's poorest districts (where one in five are jobless), Ms
Carmona's family receives no state money. Her husband's unemployment benefits
ran out a year ago. They received a small payment from the regional government
of Madrid for a few months, but that has also ended.
Ms Carmona does whatever odd
jobs she can find, such as covering for shop assistants on their holidays.
Spain has a state-run jobs agency, the National Employment Institute (INEM),
but Ms Carmona says it has never found her work: “That only comes by word of
mouth.” The Carmonas have not paid their mortgage in two years and are behind
on utility bills. A local food bank has helped feed the two children, aged four
and 15. Ms Carmona’s brother-in-law has pledged to put her elder son through
university. Spaniards have a long tradition of keeping up appearances, and many
of Elsa's neighbours are too ashamed to admit to their growing poverty. “That's
why you don't see it on the streets,” she says. Cáritas, a Roman Catholic
church charity, helped one in twenty Spaniards last year.
The gap between the
government-championed economic figures and the reality of many people's lives
explains why Mr Rajoy's centre-right Popular Party (PP) has shed half its support since winning an absolute majority at the 2011 general election. The bump
in first-quarter unemployment was partly seasonal as temporary Christmas jobs
were shed, but the five European regions with the worst unemployment are all in
Spain, according to Eurostat figures. Southern Andalucía, Spain's most populous
region, leads the list at a whopping 35%. Almost half of the country's
unemployed have not worked for more than two years.
Many Spaniards are like Elsa
and her husband: neither fully employed, nor fully unemployed. The economics
team at the Ciudadanos party sees a growing number of working poor, with
incomes below the state-set annual minimum wage of €9,080 ($9,830). About 24%
of salaried workers are on temporary contracts; half of those quizzed by the
country's Labour Force Survey say their contracts are for fewer than six
months. Part-time jobs now account for 16% of the total. Young people and
immigrants are leaving the country, shrinking the labour force—and making the
high unemployment rate all the more striking.
José Ignacio Pérez Infante, of
Spain's Association of Labour Economics, worries that the rapid increase in
construction jobs in the last quarter means the country is heading back to the
bricks-and-mortar growth model that pumped up a housing bubble earlier in the
century. The IMF thinks it will take Spain until 2017 to return its economy to
the size it was in 2008, before the bubble burst.
Economic growth is running at
around 3%, but that is not yet enough. Mr Rajoy's PP hopes growth and jobs will
eventually help it emerge on top of the polls, which are currently split
equally between the PP, the Socialists, the liberal-minded Ciudadanos, and the upstart left-wing Podemos party. But the PP's reputation as a trustworthy manager of the economy has been
hurt by cronyism and corruption. Rodrigo Rato, the former PP finance minister
and IMF boss, was temporarily detained last week by police investigating
allegations of tax fraud.
Mr Rajoy's economic recovery
has arrived too late to save his party at the regional and municipal elections
due across much of Spain on May 24th. It is unlikely to have created stable
jobs in Vallecas, or many other parts of the country, by the time a general
election is held at the end of this year. And it may come too late for the
Carmonas. Elsa is not sure how long the Santander bank will defer repossessing
her apartment. The government's future is now just as uncertain as that of
Spanish workers.