◼ ECONOMICS Bloomberg Businessweek March 9, 202031COURTESY LIBRARY OF CONGRESS. DATA: NATIONAL STATISTICS INSTITUTE
● Unemployment remains stubbornly high,
even with job gains across the ContinentSpain Gets
Left Behind
THE BOTTOM LINE Temporary contracts and a weak rental market
are barriers to employment in Spain, where workers in the south in
particular have missed out on Europe’s broader economic expansion.Each year, Raquel García anxiously awaits the
warm weather that draws tourists to Spain’s south-
ern beaches—it’s her only opportunity to find full-
time work. “When the summer comes, boom!” the
34-year-old says. But when the season’s over, thou-
sands in the province of Cádiz are left unemployed.
At the end of last August, García lost a full-time
waitress job, and she and her son were forced to live
off a couple hundred euros of unemployment insur-
ance and subsidies each month. She recently found
work at a restaurant once a week—not enough to pay
her bills. “Cádiz is so rich because it has the ocean,
it has the mountains, and the food is absolutely deli-
cious,” she says. “But at the same time, it’s so poor.”
While successive interest-rate cuts have propped
up the broader European economy—helping to
reduce overall euro-area unemployment to 7.4%, the
lowest level since 2008—joblessness in Spain, and
in particular the south, remains persistently high.
Spain’s unemployment rate of about 14% is almost
twice that of the bloc; at 25%, the rate in Cádiz is
among the highest in the developed world. Much of
the blame lies in deep-seated domestic problems:
Spain has the European Union’s highest rates of tem-
porary employment contracts and high school drop-
outs and is among the EU countries with the largest
segments of low-skilled workers. It also has one of
the least mobile workforces, since elevated rates
of homeownership and other hurdles often keep
Spaniards in cities with few job opportunities.
There are some signs that those long-standing
issues have become more entrenched. Job growth
in Spain has started to stagnate, and economists say
the unemployment rate probably won’t fall much
below 12% or so in the coming years. “It is a dys-
functional labor market,” says Marcel Jansen, a pro-
fessor at the Autonomous University in Madrid.
About 90% of the jobs created in Spain in recent
years have been temporary—a quarter lasting less
than a week. Some employers roll over those short
contracts repeatedly, for months or even years at
a time, leaving workers uncertain about how long
their job will last. That’s mainly because it’s easierand costs less for employers to fire a worker on a
temporary contract. The high turnover discourages
companies from investing in training, so workers
don’t build up the skills they need to escape the
trap of sporadic unemployment.
Successive governments have failed to tackle
the overreliance on temporary contracts and the
chronic problems plaguing the job market in gen-
eral. The last major attempt to improve labor laws
was in 2012. Spain’s new left-wing government has
put the issue back in the spotlight with plans to
reverse some of those changes. Economists warn
it would be better to improve rather than undo the
previous reforms, which could be damaging at a
time of slower economic growth.
Many workers are also stuck with mortgages
that make it difficult to relocate for work.
Homeownership in Spain is the highest among
large EU countries, at 76%, while the rental mar-
ket is short on apartments and long on complex
and costly paperwork. “There’s not an extensive
rental market to facilitate those kinds of moves—it’s
an important impediment to mobility,” says Miguel
Cardoso, an economist at Spanish lender BBVA.
Even those who take the financial risk of mov-
ing have difficulty finding good employment oppor-
tunities. Spain has a government-run website for
job seekers, but economists say it’s not updated
often and doesn’t include many available positions.
Publicly funded employment agencies aren’t used
as much as in other EU countries, and fewer than a
quarter of the long-term jobless are helped by indi-
vidualized, targeted support from employment ser-
vices, compared with an EU average topping 80%.
Some Spanish regions, such as in the industri-
alized and autonomous Basque Country, have had
success training unemployed workers for in-demand
jobs. But those in the less industrialized south—
where unemployment is the worst—have strug-
gled. In Cádiz, the problems date to before the 2008
financial crisis. The province’s once-powerful ship-
builders have been shedding jobs for decades, and
the production of Cádiz’s famed sherry wine has
become more mechanized, requiring less labor.
Rosario Rodríguez, 49, has spent her adult life
working on short-term contracts, most recently as
an assistant in the kitchen and laundry room of a
nursing home. Still, she’s never considered leaving
her home city of Cádiz. “In cities where there are
more opportunities, the rent is a lot more expen-
sive,” she says. “When I think about the future, it’s
very bleak.” �Jeannette Neumann▼ Spain
◼Andalusia region
◼ CádizCádizCórdobaHuelvaSevillaJaénGranadaAlmeríaMálaga24.7%National rate
13.8%▼ Unemployment rate
of provinces in the
Andalusia region2 0.119.718.517.820.723.623.7