All EOS blogs All Spain blogs  Start your own blog Start your own blog 

Spanish Business News

The latest business, economic,property, stock market and financial news from Spain. Keep up to date with what is happening with the Spanish economy, stock market, the economic crisis, the euro zone debt sovereign debt crisis and the Spanish property market.

Spain’s Jobs Picture Remains Guernica-Dark
05 November 2010 @ 11:37

Spanish painters like Goya and Picasso often excelled at depicting dark themes. These days, they might find a job in the country’s Labor ministry.

Bad news is bad enough–jobless claims increased in October, as reported by the ministry Wednesday, since seasonal, summertime jobs went away with nothing to replace them. But there’s not much good news, as shown by a close look at the full third-quarter set of unemployment figures released late last month.

At first glance, quarterly data showed stirrings of a job creation recovery in Spain. The overall unemployment rate, which remains the highest in the OECD, fell to 19.8% from 20.9% in the second quarter, the first decrease in three years. That sounded like a sign that the worst was over.

The sign is misleading though. Data from the country’s Statistics Institute shows that practically all of the job creation in the quarter corresponded to civil servant hirings: 90,300 new employees were added to Spain’s multi-layered administrations–including central government, the social security service, regional and local governments–taking the number of civil servants to a fresh all-time high. In Spain’s 17 regional governments, the number of officials now is 50% higher than five years ago.

This taxpayer-funded expansion of government offset the destruction of jobs elsewhere in the economy, most notably a loss of 18,500 jobs in the self-employed category. Salaried jobs in the private economy rose by a meager 2,600–this in the busy summer season when the country gets tens of millions of tourists.

The continued increase in the number of civil servants is plainly unsustanaible as the country embarks on an austerity drive that should contract the budget deficit from just over 9% this year to 3% by 2014. And those doing the hiring do this: in October, close to 95% of new contracts were temporary, according to the estimates of Fedea, a Madrid-based think-tank.

As Fedea puts it, the fact that Spanish officials, like other Spaniards, maintain a strict preference for taking paid leave in the summer months could explain by itself the latest spike in temporary hirings, a move “possibly to replace the staff enjoying summer holidays.”

Want more dark tidings on Spain’s economy? Perhaps you can wait for the first third-quarter gross domestic product estimate from the Bank of Spain, to be released as early as Friday. Indications are that 0.1% quarterly growth is the best possible scenario.

Source: Wall Street Journal

Like 0


Only registered users can comment on this blog post. Please Sign In or Register now.


This site uses cookies. By continuing to browse you are agreeing to our use of cookies. More information here. x