Friday, July 10, 2009

THE PEOPLE SUFFERING UNEMPLOYMENT the most in Spain are the underprivileged:
The fate of Spanish workers is a story of contrasts. Some have never had it so good; others have never had it so bad. Spain has the European Union’s highest unemployment and one of its less generous welfare systems. It has shed 1.2m jobs in a year. It will soon have as many jobless as Italy and France combined. Pay rises for some have led employers to cut the jobs of others. Two-thirds of workers have armour-clad permanent contracts. But the rest are on short-term deals. They are the people now on the dole.

This two-tier labour market divides workers into a privileged group cocooned from the reality of recession and the disadvantaged on temporary contracts, in unemployment or in illegal jobs. Employers do not invest in training short-term workers and are wary of hiring on permanent contracts. At any hint of a slowdown they shed the short-timers. “That the crisis has hit Spanish employment disproportionately is due to the catastrophic way the labour market works,” argues Luis Garicano of the London School of Economics.

Professor Garicano is one of a group of 100 economists who have called on the Socialist prime minister, José Luis Rodríguez Zapatero, to set about labour-market reforms. The calls have fallen on deaf ears.
The end is just brutal:
A two-tier labour market provides flexibility, but on the back of an underclass of temporary workers. This might strike most socialists as unjust. But Mr Zapatero seems happy to keep it that way.
UPDATE. Don't miss the comments; also, make sure you read this at Time: The Broken Hopes of a Spanish Generation. Sure, some of the frustration comes from too high expectations after a long boom. There's also some behaviour similar to spoiled children, used to getting what they want without any effort. For example, it's true that lots of thirty-somethings still live with their parents, but that's because they completely rule out something that is usual in other countries: sharing an appartment with two or three more people. They can only think instead of moving to a place they can actually buy, and this is becoming harder and harder every day (and of course, if you earn, say, €1000 per month, it's much more fun to stay at your parents and getting the food on the table, the place cleaned by mom, etc, and spending most of those thousand euros in having fun going out, partying or travelling, buying clothes or a relatively nice car).

What I mean is that some young people in Spain don't totally realize that growing up has its tradeoffs; you need to choose. But that doesn't mean that, particularly because of the labor regulations, they're having a really hard time while they see middle aged incompetent guys totally glued to their jobs by virtue of their iron-clad contracts. As the Economist piece says in the first link, something needs to change but PM Zapatero won't hear anyone telling this: he's too afraid of the unions taking the streets.