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ECONOMY

Spain’s unemployment rate rises for first time in a year

Spain's first-quarter jobless rate rose for the first time in a year, official figures showed Thursday, mainly due to a lull in the tourism sector.

Spain's unemployment rate rises for first time in a year
Jobless queue outside a job centre in Madrid. Photo: AFP

Unemployment from January to March 2017 stood at 18.7 percent, the national statistics institute INE reported.   

This represents a slight increase from the previous quarter when the jobless rate came in at 18.6 percent after having dropped continuously since the first three months of 2016.

At the end of March this year, Spain counted 4.25 million people without employment, the INE said, adding that the services sector — and to a lesser extent industrial jobs — had been particularly hard hit.

The services sector, which includes hotel and restaurant trade, saw 105,000 more people out of a job in the first quarter, it added.   

Spain's tourism sector is a major engine for growth in the country, but it depends on seasonality and short-term contracts.   

This year, Easter week – a major holiday in Spain that generates many jobs – fell later than previous years and was not included in the first quarter.   

According to the INE, over a quarter of all jobs were short-term in the first quarter, while more than 15 percent were part-time.    

The Eurostat statistics agency says Spain is the country with most short-term contracts in the European Union — a situation that critics say has created instability for many people who go from one contract to another, including highly specialised professionals like surgeons.

And while unemployment has gradually dropped from a high of close to 27 percent at the beginning of 2013 when the economic crisis raged, it is still twice the eurozone average and remains the second highest rate in the European Union after Greece.

The unemployment rate among young people aged 19 to 25, meanwhile, remains high at 38.3 percent.

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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