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Justin's Life

Welcome to my new blog. I plan to write about all sorts of things here, my life in Spain, ineresting things and ideas I've come across, places I've visited and so much more. Hope you enjoy it and please leave comments as your input is always appreciated.

Spain's jobless passes five million. What next?
27 January 2012 @ 17:49

I was reading this article on the BBC news website today and wondering how Spain can possibly sustain an ever increasing number of unemployed people in the country.

The figure now stands at 5.3 million unemployed, representing a difficult-to-believe, 22.8% of the population.

And it gets worse if you're young.  If you're fortunate to be between 16 - 24 then you'll be unfortunate in being 48.6% likely to be unemployed.

These are shocking statistics. 

If nearly a quarter of the population aren't working and half the young people aren't either, and the jobless rate keeps increasing, I can't see this getting any better for years to come.  The problem appears to be too big with no obvious or immediate solution.

With so many people out of work it means they have less money to spend, which means more businesses will start to struggle, which means that more people will be heading towards the (un)employment office.

It also means that the government will be earning less money in taxes and shelling out even more money to cover the spiraling jobless rate.

I'd love to be more positive about things but realistically it does seem that things have to get worse still before they get better.

And anyone reading this hoping to move to Spain and get a job here....I don't think I need to say anything further.

Employment office in Spain

Like 0


CPC said:
28 January 2012 @ 00:10

Grim statistics and you have to wonder how the government can pursue a policy of harsh austerity and at the same time create jobs. It´s the unemployment levels that are the tinderbox. It was the 40% youth unemployment in Egypt that was a contributing factor to the revolution.
Our community is slowly being destroyed by home repossessions and unemployment. So many of the kids' friends have disappeared from their local school. Student numbers have dropped from 20 to just 6 in one classroom and the plans for the construction of a new school with comedor have been scrapped. It's all terribly sad.

JWS said:
28 January 2012 @ 14:35

The whole of the EU is caught between a rock and a hard place.
Spain is especially affected because it has borrowed too much money from the EU and now has to pay it back. Unfortunately the borrowed money was not used to improve the education system. Here in Andalucia the kids drop out of school at an alarming rate and I am constantly surprised at meeting people in their late 20's and 30's who struggle to read and write. In the 21st century what jobs can be created for uneducated people?
Perhaps if all agricultural machinery was subject to a high tax then farms would be able to employ these people? Better a low paid manual job than no job at all. The local advice is make sure that your house is well secured and be careful when going out at night as crime is on the increase and will continue to do so as people come to the end of their benefit entitlements.

Gary Montagu said:
28 January 2012 @ 15:09

It's a shocking statistic but as someone who has a thriving and growing business in the specialist tourism field in Spain, I know how ridiculous it is that the provincial government don't do anything to make it easy for entrepreneurs to establish businesses that employ people. The red tape and bureaucracy is appalling and seems to be aimed at stopping businesses from starting and becoming established. It verges on 'criminal' how bad the administrators and pen pushers are in putting obstacles in the way of moving things forward for the Spanish people and helping the economy to grow. It seems that so long as they have jobs and money in their pocket they don't care about their fellow citizens and feel it is their job to do whatever they can to stop enterprise. The days of large corporations employing thousands of people are well gone. It's not about grants to start-up enterprises because most successful small businesses don't need them. They will always find a way to make it happen. It's about support and help to get licences, assistance in operating legally without waiting for years for these things to happen. I wrote to the Junta de Andalucia requesting a meeting as I am making a significant investment in the region, want to employ local people and am bringing hundreds of wealthy people from all over the world to the region who spend a great deal of money here. What did I get? A response saying the head of tourism will be in contact. That was 9 months ago and no sign of any follow up. I spoke to my solicitor about registering my business in Spain rather than the UK where it is based and he said that I would be mad to face the hassle that I'd get!! Which pretty much sums it up. So no wonder the problems exists. No-one in power really gives a monkeys. Radical change is needed in the attitude of the people who's job is supposed to be to serve but who see it as a licence to take before any progress will ever be made. With the state of the Spanish economy rapidly sinking, the pen pushers remind me of the band on the titantic playing merrily away!!

Justin said:
28 January 2012 @ 15:11

Gary, I love the Titanic analogy ;)

Mike B said:
28 January 2012 @ 16:15

I think Gary Montagu is as close to the nail as it is to get, I agree with fairly much al of what he said. It is not just unemployment these politicians and funcionarios don't give a hoot about but fairly much everything that does not affect their earnings.

The problem with 'so called' illigal properties and land possesion, this has been a major problem for many in the last 5 years yet nothing worth a dam is done to sort the problem and compensate these people, yet all this just leads to people not trusting Spain enough to invest in property here... time goes by, nothing is sorted and less and less people who might invest in property here don't! Talk about killing the goose that laid the golden egg, the Spanish will not be content until they have ripped it's carcass to bits.

Bob Manning said:
28 January 2012 @ 16:17

Just wondering if you got the message I sent you

Graham Hunt said:
28 January 2012 @ 16:21

I think Gary hits the nail rtight where it needs to be hit. If things are not made easier to set up and run a business then nothing will get better. The civil servants are one of the major problems of Spanish society as they feel they are in a powerful position so make the lives of others ridiculously difficult.

M said:
28 January 2012 @ 16:33

My husband lived in Spain for most of his life. He speaks 5 languages fluently, and is exceptionally qualified in the fields of both tax, law and computer repair...and yet, after he lost his job in 2009, finding another one became impossible for him. I speak 2 languages fluently and am qualified in accountancy, but I struggled to find a job after being made redundant in 2007...even resorted to working in McDonalds, just to make ends meet. Eventually our Paro ran out, no job offers in sight, we left Spain for the UK. My husband had been looking for work for over 2 years, and found one in under 3 weeks living in the UK. We lost our home, we lost our lives, we left behind family and friends, just so we could have money to eat and feed our kids, put clothes on their backs, a roof over their heads. It's a shocking state of affairs that goes much deeper than people realised. One friend of ours in a similar position, used to beg for scraps from the butcher to feed her "dog"...when she was actually feeding her kids with it. She rummaged through the bins for food. Not having a job in Spain is a lot more serious than people realise and unless you have family supporting you financially you can't survive. We were not the only ones from our group of friends to escape Spain. We loved our lives their...but we were dying.

Justin said:
28 January 2012 @ 16:36

Bob, not sure which message you are referring to. Send again to Thanks

M, that's quite a (real life) story you've written there but I'm glad at least you guys are ok back in the UK now. It IS very tough out here.

BPY said:
28 January 2012 @ 16:45

So much of the Spanish economy was linked to tourism and building and now both those industries are declining at a frightening rate. The Spanish people are coping because of their strong family loyalties but, eventually, it will be too difficult to support the number of people who are unemployed, even here. I am desperate to go back to the UK but cannot sell my house, I have no other savings so am stuck here - truly don't know what I can do.

Steve B said:
28 January 2012 @ 16:48

You want to try being Autonomo - if I don't bring in €2000 in clear profit every month, then I am paying more Tax and NI than an employed person - and in this climate two grand in profit every month is just not happening.

The government have also introduced extra stringent recording of Autonomos accounts, to ensure they squeeze every last drop tax out of those of us who can be bothered to start work at six in the morning at work through 'till bedtime.

As an insider to the hideous Autonomo system, I can see that it is not just the case that the government are not encouraging the unemployed to 'get on their bikes', but are actively discouraging this from happening.

Raj said:
28 January 2012 @ 18:22

What a mess the world is coming to. We are entering a period that this generation has never seen before. SInce the 1960's, the developed countries have lived on nothing but credit. If you want a new car just go in to your local BMW garage and get one, pay over 3 or 4 years, no problem! Want a new big screen tele? How about a laptop, Camcorder? what about a nice holiday? My parents generation were taught that if you dont have the money in your hand, you dont get the goods. What a shame that everything went the wrong way. Then in 2008 the credit crisis hit and that was the end of endless credit and also the end of this system of thinigs. Now, we are heading for total annihilation. How can things ever get better? I moved to spain in 2008 and as an I.T. consultant, did OK working here and there for a few years, but the pay is so low there in comparrision to the UK that I decided to come back. Within one month in the UK I managed to get an contract that payed extremely well and bought a house. But I see things getting so much worse all over the world. So many big companies are going to the wall, Kodak went into administration last week and its just the begining. I am scared for the future, not just for me and my little 4 year old girl, but for everyone. I wish I could end this comment with the "but on the bright side...." type comment, but I honestly cant think of one!

paul said:
28 January 2012 @ 18:29

Please excuse my ignorance but could someone explain what autonomo is please.

gatita said:
28 January 2012 @ 19:33

paul, Automono just means 'self employed'. And as Raj says, to becomeself employed in Spain means you are fairly well off!!!

It is a ridiculous system, wether you are Julio Iglesias or a simple market trader working a couple of days a week, you have to find over £200 amonth BEFORE and IF you make any money.....CRAZY

Leslie Townsend said:
28 January 2012 @ 20:09

Judging from the recent sales when the queues were extraordinarily long. Also there is a local cafe near where I live which is nearly always has custom. There is money somewhere, you just need the right business, I suppose.

David H said:
28 January 2012 @ 20:30

Fortunately I am retired and enjoying many aspects of life in Spain; I don't have to face the problems of having to find work here. From my limited experience of living here I feel that this is a country in which people tend to be self-centred and discourteous. It's every man for himself and to hell with the rest of you. I can't see anything changing until a new generation emerges that has a strong work ethic and a concept of customer service. I know this is a bit of a generalisation, and I know that Spanish people are family orientated at content with what they have, but this isn't the way in which the rich countries became rich.

Robbie said:
28 January 2012 @ 23:25

It's a great pity about the young people in Spain. We have a place in Altea and we know many bright Spanish youngsters with good educations, many with degrees who cannot find any kind of work. In a place like Altea which is very nice if you are fairly wealthy there is nothing for well educated youngsters.
The system in Spain doesn't encourage self employment either as it is necessary to pay national insurance of €260 per month no matter if you are earning or not. To set up a company is very expensive and time consuming compared to the UK for example where you can have a business up and running in a week for less that £200. Trying to set up a company in Spain and dealing with the idiotic bureaucratic system is enough to knock the entrepreneurial stuffing out of you before you get going. And then you have to deal with the likes of Telefonica and the Correos, the two most useless companies on the planet. Neither of whom have any concept of customer service.
So is it any wonder that educated youngster are leaving Spain in droves.

Robbie said:
28 January 2012 @ 23:32

It's a great pity about the young people in Spain. We have a place in Altea and we know many bright Spanish youngsters with good educations, many with degrees who cannot find any kind of work. In a place like Altea which is very nice if you are fairly wealthy there is nothing for well educated youngsters.
The system in Spain doesn't encourage self employment either as it is necessary to pay national insurance of €260 per month no matter if you are earning or not. To set up a company is very expensive and time consuming compared to the UK for example where you can have a business up and running in a week for less that £200. Trying to set up a company in Spain and dealing with the idiotic bureaucratic system is enough to knock the entrepreneurial stuffing out of you before you get going. And then you have to deal with the likes of Telefonica and the Correos, the two most useless companies on the planet. Neither of whom have any concept of customer service.
So is it any wonder that educated youngster are leaving Spain in droves.
How do we know? We spent a year and several thousand euros in Spain trying to get a Limited Company off the ground. We gave up with the Bureaucrats, Telefonica, The Correos, and went back to UK. Never again will we attempt to run a business in Spain.

Steve Hall said:
29 January 2012 @ 04:44

The post below is what I added to Graham Hunt's excellent blog about Spain at the Crossroads that Justin highlighted.

From reading the posts here, it seems that most people are of a similar mind. I think that the FACTS are irrefutable.

Just a couple of things to comment on this thread:
BPY said:
"So much of the Spanish economy was linked to tourism and building and now both those industries are declining at a frightening rate."

I am not sure what basis you are using for this - tourism is (thankfully!) doing rather better than anybody expected. Last year's figures for number of tourists, average spend per tourist, hotel occupancy, flights etc were quite encouraging. 2012 has got off to a good start and the forecasts are positive. Building is in no way declining. It is D.E.A.D. ("It has ceased to be", Python)

The collapse of Spanair is NOT good news but it is another nail in the coffin of Spain's least responsible and most detested union - the pilots'.

Leslie said, "said: Judging from the recent sales when the queues were extraordinarily long. Also there is a local cafe near where I live which is nearly always has custom.

One swallow does not make a summer. One cafe does not make an industry trend. In any case, yes, they may "nearly always" have custom. Consider that they "absolutely always" need custom .....just to survive. I have been talking to experienced bar-owners in Fuengirola recently, they expect 25-30% of bars to close this season alone! I was in a bar tonight for almost exactly one hour - I counted between 25 and 40 people. Let's say they spent 5 euros per hour ...that means the total takings were ca 160 euros for that one hour. With costs of 80 euros (say 100% mark-up on drinks), 2 wages say 15 euros, electricity, water, gas etc say 10 euros, rent 5 etc etc that leaves precious little left to even survive never mind make a profit .....oh and they were paying a singer (50 euros per hour?) So, on their busiest hour of the week, they are LOSING money!

January 2012

Spain is in a mess …..simple, period or whatever you want to say.

Spain is very clearly at a crossroads and I am minded of Alice asking the Mad Hatter which way she should go. His reply was that this would depend on where she wanted to go. Spain went to the polls on 20th November and very clearly voted for a change of direction. Now, it is up to the new government to decide where that should head.

Sadly for eight years a PSOE government denied a blindingly obvious fact – Spain you are in a mess and you are a ship without a captain and a country without direction. Initially there may have been some reason as, ON THE SURFACE, everything looked rosy and we were all set to each partridges for the rest of our lives (This is a Spanish expression that is more figurative than “We all will live happily ever after”. If you mix the metaphor with “meat on the bone” you will get a picture of the Spanish Dream) Sadly, to that must be added the government’s ostrich like “head in the sand” approach to, well, any fiscal planning and you will see that all was not well. The Spanish for to turn a blind eye to something is “hacer el sueco”. (Act like a Swede) perhaps we should start to call it “hacer el español” because nobody wanted to recognise that Spain was no latter-day El Dorado but rather an economy built, literally, on sand and not on rock or anything else with any vestige of stability.

The challenge was that “everybody” thought that they had found the key to eternal prosperity. Sand, sea, sun and sangria. The Northern Europeans were wealthy and wanted to buy property in the sun, usually by the beaches of the Med where they could imbibe the (cheap) local tipples. The Spanish banks once known for their ultra-conservative lending policies started giving out mortgages like confetti – often to people who had no realistic expectation of paying them. Foreigners with 100% mortgages in Dublin and Dudley now took a second 100% mortgage in Dolores or Denia. Young Spaniards quickly realised that banks were opening the floodgates and many of them took mortgages that they also had no realistic chance of paying-off. Such was the start of “El Boom”.

This wanton monetary approach was not such a huge issue when house prices were going up and up (2001 -2007) but became a mega challenge as soon as house prices started to flatten and a problem of gargantuan proportions when they started to fall. I remember talking to my branch manager in 2007 when he quipped that he did not know what the concept of negative equity was never mind the Spanish for it. Fast forward two years, he was now lamenting that his bank is plumb centre of an urbanisation of 2400 almost identical homes, all marketed to foreigners and often with 100% mortgages. Now that is not hugely clever at any time but when the property starts to tumble in value and people find themselves with negative equities on ghost-estates you have an accident waiting to happen. It did. By 2012, the bank is sold for a peppercorn and people cannot withdraw their bonds etc!

From the French border to the Portuguese border whole new towns were thrown up with minimal infrastructures. Towns doubled in size (Torrevieja 50,000 -100,00 in 6 years) and everybody wanted in on the bandwagon. Everybody wanted their slice of the cake (and more!) “Greed was good” was the mantra and if you could lift a hammer you were now a master builder and if you could change fuse, you were suddenly a time-served electrician. Unemployment was low and waves of immigrants flooded in from Eastern Europe and North Africa. Corruption was rife and huge scandals have rocked the country. Valencia, Marbella, Catral, Albox, Algorfa, Mallorca ….the list just goes on. Presidents of major corporations are routinely tried and even the king’s son-in-law is facing imprisonment and has been removed from all royal duties. Many native Spaniards and “New Spaniards” were delighted at the chance to earn a good living legally. Sadly, many in high places used their powers in municipal, local, regional and national governments to buy and sell land, re-classify it illegally, allow building on protected land or simply take bribes! The end result was one and half million empty homes which is the largest property stock anywhere in Europe! With huge unemployment and banks again reluctant to lend – it is going to take a long time to get this over-supply out of the system which has led to 80% of builders being unemployed and 2/3rds of all estate agents and property companies closing their doors!

Yes, the whole economy was built on property and it’s half-brother tourism (especially residential tourism). That’s fine until your two groups of “prospects” suddenly find cracks in the system. For the foreigners, the dream homes were often built to a poor standard, there was very often precious little in the way of infrastructure whilst the young Spaniards began to understand that owning your own home is NOT such a great idea if you can’t afford to pay for it. Their elder siblings and definitely their parents had stayed at home longer to save a bigger deposit and then have a much smaller mortgage. This new generation were quite simply not able to pay the mortgages, the food and car bills and ever-increasing utility charges etc even when they were in work. When they started losing their jobs, the situation became catastrophic.

Unemployment has increased exponentially and youth unemployment spiraled completely out of control. With a national average of 44%, it is evident that some areas have more than one in two young people out of work. National unemployment has peaked at 24% and after the landslide victories for the PP (centre to right wing) people are now beginning to take their heads out of the sands and accept that there is a genuine crisis. The “milestone” 5 million unemployed is a chilling factor. The summer and autumn of 2011 saw just about everybody take to the streets to complain about their fates. Civil servants, fire-fighters and police did not get paid on a routine basis in many parts of Spain whilst a national movement mobilised huge percentages of citizens of all ages and political persuasions. There was little of the random violence of Croydon or Tottenham! These were people who wanted a job, a roof that they could afford over their head and food on the table. They also wanted to see the end of the corruption that is almost endemic in public office.

Spain was, in many eyes, on the point of anarchy and but for the November elections everything could easily have got out of hand. Spain is a young democracy and has come a long way since the death of Franco and its first tentative steps towards democracy in the mid 70s. In this age of mass media television was 24/7 focused on the fragile state of the country. What had happened in Argentina just 10 years before was painfully and easily remembered. The overwhelming majority of the Spanish did not want that! The PP were handed the election on the plate but would the governance of the country be a poisoned chalice.

The Finance Minister started one of his first speeches talking about “The worst economic crisis in our history….the one that has sapped our youths’ confidence in their future” It is clear that, at least, the new government are aware of the gravity of the problem. Rajoy the prime minister has promised and is implementing major labour reforms but it is too early to predict whether they will have any success or will they just be the Second Verse of “Spain fiddles whilst Madrid burns”. (Apologies to Nero in Rome) Spain is a full member of the Euro and as such an integral part of the whole Eurozone. Merkel and Sarky had lost confidence in Zapatero and they have both given Rajoy very aggressive targets to meet with a very clear, “If not….” message. Civil servants have had their hours increased by 2 and half hours per week and a huge series of cuts have been enforced – from not lighting the roads, to fewer tube journeys, teachers and health workers. There are some very bitter pills being swallowed with many more to be prescribe over the months to come.

Yes, Spain, IS at a crossroads. Will Rajoy be the man to lead it on a straight and safe track? My jury is out. He is manifestly a better option than Zapatero whose one claim to fame was his apparent honesty. Respect to him for that but,….. Will Rajoy be able to tame the unions? The first signs are very positive indeed and the union leaders seem willing to cooperate. They realise that greater flexibility is required and their was general disgust at the Iberia pilots’ strike especially when it was expertly communicated that they were about the best paid employees in Spain. Their actions were prejudicing the jobs of thousands of lesser paid workers! With potentially 25% unemployment by the end of the year most are committed to a fairer sharing of the cake.

All this said, I genuinely believe Spain WILL bounce back. I fear it will not get better until it gets worse I fear but there is light at the end of the tunnel. Yes, we will go down the wrong road a few times BUT lessons do seem to have been learned. There is no desire for a boom and bust economy and Spain still has everything that made it so special before the last 10 years of madness. We still have our sun, sea and sand, we still have an impressive heritage and a well-integrated multi-cultural society. Spain can still organise the best ferias and fiestas in the world and offers some of the best food and wine to be found anywhere. We have hopefully learned from an over- reliance on inbound tourism from Northern Europe but the Brits, Irish Scandinavians and Germans will still come and keep the tourist tills ringing. The younger generation are becoming more outward-looking. They are learning languages, they are travelling for employment, they are learning IT skills. It will take time for sanity to return. I am certain of that.

Reinier said:
02 February 2012 @ 15:57

It is true that it is ridiculous you already have to pay 253 euros as an autonomo before you even earn a penny. That is the best way to drive people in to earning black money.

Ron said:
08 February 2012 @ 16:17

Spain has no brain.

André Johnsen said:
06 March 2012 @ 00:06

What the government should do is teach the young how to start their own business, and give micro credits to people that have a good business idea.

Spain has got really competitive salaries compared to the rest of Europe, but they need to think outside of the box, and not just focus on tourism. There are so many businesses that could have been created in Spain.

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