By the Blouin News Business staff

The ILO sees a grim future for Spain’s unemployment

by in Europe.

The future of Spain's unemployment.jpg

 

Spain’s unemployment numbers may have very slightly improved in the last quarter of 2013 but its outlook in the upcoming years is still extremely grim. As its government and business leaders continue to deliver a positive message on the economy, the jobless rate gives them the lie: it’s still the second-highest in the European Union, after Greece’s.

First, the (sort of) good news: the number of unemployed dropped ever-so-slightly in the last quarter of the year — 8,400 fewer people were out of work in the October to December quarter compared with the previous one, according to Spain’s national statistics office (INE) in a Thursday release.

Now for the bad news. Spain shed jobs for the sixth consecutive year in 2013: 198,900 jobs were lost, pushing the total number of Spaniards unemployed to 5.9 million, more than a fourth of working-age Spaniards. The data adds to years of recession and job crisis: 3.75 million jobs have been lost since the crisis began in 2008. More alarming is the number of households in which all family members are unemployed: 1,830,000, a 25,000 increase from the third quarter of the year. In Spain, poverty and social exclusion is consequently on the rise (also in the rest of the E.U.)

But the worst in unemployment is far from over, at least in the eyes of the International Labor Organization. The ILO published this week its Global Employment Trends 2014 report, and its prediction for Spain over the next five years is dire. As the chart above shows, the pace of lowering the jobless rate is going to be very slow. In fact the ILO believes the unemployment rate will increase in 2014 to 27.2%, the highest level since the euro crisis, and will then slowly begin to fall — 27% in 2015, 26.7% in 2016, 26.2% in 2017 and 25.7% in 2018, around the same level it was in 2012.

The ILO warns on the share of young people (aged 15–29) that are neither employed nor in education or training (NEET), which has risen 8.7% since 2007. Signs of a moderate improvement in labor market conditions may be barely visible but the path to recovery remains long and difficult. Spain’s government forecast 0.7% growth in 2014; the International Monetary Fund tripled its growth outlook for Spain for 2014 to 0.6% from 0.2% in October. But these growth rates — even if achieved — won’t be enough to lower sky-high unemployment rates. Net job creation should be among the government’s priorities – that much is clear – rather than a new abortion law and other initiatives. Should the country prove able to challenge ILO’s predictions, that would be a good start in showing they are making headway on employment.