Spanish Unemployment Rate Rose to 20% at the End of 2010

Spanish Unemployment Rate Rose to 20% at the End of 2010
El País: La tasa de paro se instala en el 20% al cierre de 2010
The unemployed increased by 121,900 to a 4.7 million, a level never before seen. 138,600 people lost their jobs.
Alejandro Bolaños, January 28, 2011

Spanish Unemployment Rate
4th Quarter EPA Report – El País

2010 will be remembered as the year in which “the Spanish economy escaped,” after great suffering, the Great Recession. But it is also the year in which the unemployment rate reached the 20’s. In addition, the most recent statistics of the Survey of the Active Population (EPA) certified what didn’t happen: we will have to wait longer in order to finish off the brutal destruction of employment that has accompanied the crisis. After two consecutive quarters of “light increase in job creation,” in the fourth quarter the EPA registered 138,600 more people without jobs, of which 16,700 decided not to continue seeking work. The other 121,900 added their names to the unemployment rolls.

The end of seasonal contracts in tourism and business at the end of summer and decreased activity in construction because of bad weather conspire to make the fourth quarter a poor period for job growth. 2010 was no exception, but the seasonal upturn of unemployment is another drop in the bucket of unemployment that has filled for 3 years. According to the EPA, the number of unemployed reached 4,690,000 in the fourth quarter. The profundity of the crisis and the increase of the labor market combine to make that 4.7 million an unprecedented number.

The destruction of jobs in the fourth quarter was concentrated in service sectors, which had guided the light recovery in the second and third quarters. The services, which employ 70% of Spanish workers, shed 115,800 jobs in the fourth quarter, a retrocession similar to the one which closed 2008, when the Great Recession broke out. The loss of employment in construction (95,600, double the industry’s losses in the fourth quarter of 2009), a bad side effect of the completion of public works programs subsidized on behalf of city governments. Only industry, led by exports and agriculture, thanks to the beginning of some intensive campaigns in the work force, added jobs in the last quarter.

The “last delivery of EPA” also serves to gauge the impact of three years of massive destruction of employment. In the fourth quarter of 2010, there were more than 2 million long-term unemployed (seeking work for over a year) for the first time. These 2.15 million are almost half (47%) of the unemployed. The group that is growing most quickly is those seeking work for more than two years, almost a million (940,000), double last year.

Youth unemployment, 42% of those under 25 seeking work, is also very close to the worst numbers in recent economic history (in the ’90s it reached 50%). The number of households in which everyone in the labor pool is unemployed has risen above 1.3 million, almost 8% of the total.

Since the last quarter of 2007, the economic crisis has done away with more than two million jobs. To make yourself see the glass as half full, you have to make annual comparisons. The loss of jobs in the last year (there are 237,000 less positions than in the 4th quarter of 2009) is less than a fifth of the 1.2 million jobs destroyed in 2009. In the services, the most important sector of the Spanish economy, there has been an annual increase in jobs for the first time in two years: 29,000.

With the data from the fourth quarter, the unemployment rate rose to 20.3% and the 2010 average to 20.1%. It slid below the government’s prediction, based on GDP and public debt, of 19.8% rate. “A bad year has come to a close,” admitted the Secretary of the State of the Economy, José Manuel Campa. We will see if 2011 is another bad year for employment, or if, as the government predicts, it will mark a long-awaited change in fortunes, even if it’s only a timid one. It will also clear up the question of whether the number of unemployed will break 5 million, a hypothesis the government firmly rejects.

Unemployment Rises in All Communities Besides the Basque Country and Valencian Community
Unemployment rose in the last year in every Autonomous Community except the Basque Country and the Valencian Community, and the rate of the increase was especially serious in Galicia (20.86%), Aragon (18.92%), and Cantabria (17.23%), much higher than the national average (8.55%). Other places where the rise of unemployment was higher than the national average were Asturias (16.08), Murcia (15.60), Extremadura (15.49), the Balearic Islands (14.42), La Rioja (12.71), Castile-La Mancha (12.31), Castile and León (12.17), Navarre (10.95), Andalusia (9.03), and Madrid (8.72).

The only places below the average were the Canary Islands (7) and Catalonia (6.80). On the contrary, unemployment decreased in the Basque Country (-6.72%) and Valencia (-0.03%).

As for the unemployment rate itself, the highest is in Andalusia (30.34%), followed by Extremadura (27.84%), the Canary Islands (27.62%), and Murcia (24.61%), as well as the autonomous cities of Ceuta and Melilla at 35.66 and 32.61%, repectively. With respect to the third quarter of 2009, unemployment rose the most in the Balearic Islands (23.02 percent), Cantabria (22.68 percent), Aragon (18.53), and Asturias (15.46). Decreases in unemployment were registered in the communities of Navarre (-7.23), Valencia (-2.21), Madrid (-0.67), and Andalusia (-0.19).

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