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Spain unemployment hitting nearly 1 of 4 workers

By Ciaran Giles

Associated Press

Published: Friday, Jan. 27 2012 11:50 a.m. MST

A woman gestures at the camera while she begs on the street in Pamplona, northern Spain, Friday, Jan. 27, 2012. The National Statistics Institute says Spain's unemployment figures has surpassed the 5 million mark, with the jobless rate shooting up from 21.5 percent to 22.8 percent in the fourth quarter. The new conservative Popular Party government pledges new labor reforms to try to halt further job destruction as Spain already has the highest unemployment rate in the 17-nation eurozone.

Alvaro Barrientos, Associated Press

MADRID — Spain's brutal unemployment rate soared to nearly 23 percent Friday and closed in on 50 percent for those under age 25, leaving more than 5 million people — or almost one out of every four — out of work as the country slides toward recession.

Spain's National Statistics Institute reported that 5.3 million people were jobless at the end of December, up from 4.9 million in the third quarter — a jump in the unemployment rate from 21.5 percent to 22.9 percent in the fourth quarter.

For those under age 25, the rate hit a whopping 48.5 percent, and the institute also reported that Spain now has 1.6 million households in which no one has work.

The numbers didn't surprise Spaniards, who are gearing up for another recession after the economy briefly surfaced from a crippling two-year downturn triggered by the 2008 credit crunch and a burst domestic real estate bubble that had supercharged Spain's economy for nearly a decade.

Spain already has the highest unemployment rate in the 17-nation eurozone, where the average jobless rate is just above 10 percent. Ireland holds the No. 2 spot with 14.6 percent unemployment and had to take an international bailout last year.

Javier Pelayo, an unemployed construction worker begging outside a Madrid subway station, said he hasn't had steady work for more than a year. He sat on a piece of cardboard with a handwritten placard reading: "For the love of God, help me feed my son."

"They have evicted me from my house and I've come to the capital to see if my luck improves, but this is how you find me," said Pelayo, 40, who moved to Madrid with his wife and son after losing five years worth of mortgage payments on his apartment because he couldn't make the payments.

Even highly trained professionals have extreme difficulty find work, or anything that pays enough for them to make it on their own in Spain. Katia Linderman Matas, a biologist, said she's looked for years for a job in Spain but will now search in Austria and Germany because she speaks German.

"(In Spain) you have to work nine hours instead of eight with bad conditions and the money isn't enough for you to get by," said Matas, 29. "If I wasn't living with my mother, I don't know what I'd be doing now."

Spain was Europe's top job creator until 2008, and began to emerge from recession at the end of 2010 but is now expected to head into a new one this quarter, and the average yearly salary is only about €21,000 ($27,600).

Spain's new center-right government said the bad unemployment news wasn't a surprise and that an overhaul of labor laws aimed at spurring job growth will be put into place this month.

"It's a negative report and one that will make the government work with greater intensity," said Deputy Prime Minister Soraya Saenz de Santamaria.

The economy shrank 0.3 percent during the fourth quarter, and the Bank of Spain last month predicted the economy will contract 1.5 percent in 2012. Meanwhile, a survey of 4,576 businesses last week by Spain's Chamber of Commerce showed only 3.7 percent expect to add new jobs in the first quarter of this year. The rest said they would keep employment the same or cut jobs.

Saenz de Santamaria said the unemployment news "will lead the government to accelerate the rhythm of reforms," and experts said the government must make drastic labor law changes to make it easier for businesses to fire workers and negotiate with unions.

Under the current system, people who are laid off or fired must be paid between 20 to 33 days of salary per year worked, and companies can't negotiate directly with their unionized workers because they must adopt wage deals set for entire sectors.

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