We are suffering the most virulent crisis that the world has ever seen. In my opinion, it is even worse than the Great Depression.
In spite of this is a global crisis, it is being especially hard in Spain, where the worst issue is the unemployment rate and our incapacity to create new jobs.
To better understand the current Spanish situation, take a look at next data:
According to the latest data published by the Spanish Employment Office, INEM, in October of 2012 in Spain there were 4.833.521 unemployed people.
In Spain there are two ways to calculate the unemployment rate. The first one is based on the number of people registered at the INEM (Spanish Employment Office) and the second one, it’s calculated by the National Statistics Institute and it is even worse, it says that we have 5.778.100 unemployed people on the third quarter of 2012.
Spain is the country where “El Lazarillo de Tormes” was born, then, we can imagine that lots of people are collecting unemployment benefits and working under the table at the same time. But the official data say that 25% of the Spanish population are unemployed, and this is horrible.
As you can see from the graph below, the 53% of the Spanish young people do not have a job. While, for example, in the United States the rate is only 16,8%.
To make matters worse, in Spain there are 1.737.900 families with all their members unemployed.
Summarizing, what does it means? One in four Spanish people do not have a job.
Has it been always like this? In late 2007 the unemployment rate started to increase dramatically from 8,6% to the current 25%.
Is the Spanish unemployed rate within the European Union average? Unfortunately not. As you can see from the chart below, Spain has the worst unemployment rate of the whole Union.
While Germany has, in October of 2012, an unemployment rate of 6,5%, in Spain we have more than 25%.
What are the reasons for this situation?
Spain has a huge amount of public deficit (we have been spending more money than we have been earning). And also, Spain has relied on a single industry, the construction.
The Spanish banks have been severely affected by the bursting of the real state bubble. And now, instead of lending money to the companies and families, they are “cleaning” their balance sheets. Without banks lending money, 500.000 companies have closed down.
In spite of this serious situation, we must be optimistic. If we are able to change our production model and, instead of working just as traders, we add value (high quality and design…) to what we do, we will achieve economic growth.