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ECONOMY

May marked record drop in Spain’s unemployed

More good news on the economic front as government data showed that the number of people seeking unemployment benefit fell sharply during the month of May.

May marked record drop in Spain's unemployed
People queuing outside a Spanish job centre. Photo: Dani Pozo/AFP

Spain’s Employment Ministry data released on Tuesday showed that jobless benefits fell by 117,985 to 4.22 million, the best results for a May since records began.

The number of registered unemployed was down by 357,354 or 7.8 percent over May 2014, the biggest yearly drop since the current statistical series began in 1996, the ministry said.

The surge in job creation was driven in part by seasonal employment needs at the start of the summer tourist boom.

The most noticeable drop in unemployment came in the services sector where jobless claims fell by 68,826 across Spain but it also fell in construction, industry and agriculture sectors and each of Spain's regions.

Spain has been on the road to economic recovery since mid 2013 when it emerged from its second recession since the start of the economic crisis five years earlier.

The figures demonstrated that the 16th consecutive month of improvement in the number of jobless when compared to the year before.

“What is really important is that every day we gain workers contributing to the social security system,” Secretary of State for Social Security Tomás Burgos said in a statement from the ministry.

“We have seen 16 months of positive growth.”

Prime Minister Mariano Rajoy has predicted that the country's economy to expand by 2.9 percent during 2015 and promised to create half a million jobs to drive down the unemployment rate from the current 24 percent to  22.1 percent by year end.

“There is still much to do. There are over four million Spaniards who still can't work,” said Prime Minister Mariano Rajoy after the figures were released.

“The situation is not good but we have taken steps forward,” he added.

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ECONOMY

Spain’s middle-class youngsters the most likely to end up poor across all EU

Spain leads the ranking of EU countries with the highest risk of young people ending up in poverty as adults, despite coming from families without economic difficulties.

Spain is the fourth EU country with the highest inherited poverty
Spain is EU country with most middle-class young people who end up poor. Photo: Jaime ALEKOS / AFP

Spain is also the fourth EU country with the highest rate of inherited poverty risk, according to Eurostat, the EU Statistical Office.

Data on intergenerational poverty indicates that there is a correlation between the financial situation of the household you grew up in and the risk of being poor when you reach adulthood and in Spain, there is a strong link. 

The latest statistics available from 2019 show that the at-risk-of-poverty rate for the EU was 23 percent among adults aged 25 to 59 who grew up in a poor financial situation at home when they were 14 years old. This is 9.6 percentage points more than those who come from families without financial problems (13.4 percent). 

READ ALSO: Spain’s inflation soars to 29-year high

How the situation in Spain compares with the EU

Spain has become the EU country with the highest risk of poverty among adults who grew up in families with a good financial situation  – 16.6 percent.

This was followed by Latvia with 16 percent and Italy with 15.9 percent.

That statistics also show the countries where it is less likely to be poor after growing up in households without economic difficulties. These include the Czech Republic (5.9 percent), Slovakia (7.9 percent) and Finland (8.5 percent).

The overall poverty rate in the EU decreased by 0.1 percentage points between 2011 (13.5 percent) and 2019 (13.4 percent), but the largest increases were seen in Denmark (1.9 points more), Portugal (1.8 points), the Netherlands (1.7 points) and Spain (1.2 points).  

On the other hand, the biggest decreases in the poverty rate were seen in Croatia (-4 percent), Lithuania (-3.6 percent), Slovakia (-3.5 percent) and Ireland (-3.2 percent).

READ ALSO: Spain’s government feels heat as economic recovery lags

Inherited poverty

The stats revealed that Spain was also the fourth country with the highest rate of inherited poverty risk (30 percent), only behind Bulgaria (40.1 percent), Romania (32.7 percent) and Italy (30.7 percent).

This means that children of poor parents in Spain are also likely to be poor in adulthood. 

The countries with the lowest rate of inherited poverty risk were the Czech Republic (10.2 percent), Denmark (10.3 percent) and Finland (10.5 percent).

The average risk-of-poverty rate for the EU increased by 2.5 percentage points between 2011 (20.5 percent) and 2019 (23 percent), with the largest increases seen in Bulgaria (6 points more), Slovakia and Romania (4.3 points), Italy (4.2 points) and Spain (4.1 points).

The biggest drops were seen in Latvia (-8.5 points), Estonia (-8.0 points) and Croatia (-2.3 points). 

The largest gaps in people at risk of poverty when they reach adulthood were in Bulgaria (27.6 percentage points more among those who belong to families with a poor economic situation as teenagers compared to those who grew up in wealthy households), Romania (17.1), Italy (14.8), Greece (13.5) and Spain (13.4).

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