Entradas Etiquetadas con ‘spain’

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    [post_date] => 2011-02-09 10:59:05
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    [post_content] => Spain before the crisis had quickly jumped from a country with little or no immigration to the country with the highest immigration rate outside the United States.  Now that the economy and in particular the construction sector have slumped, these immigrants are out of work and often out of income.  What is the right thing to do?

The latest labor-market survey (EPA), for the 4th quarter of 2010, showed that the unemployment rate for native Spaniards was 18.47%, compared with 30.4% for foreigners.  Of an estimated population of 4.7 million working-aged foreigners in Spain at the end of 2010, nearly 1.1 million were looking for work actively and were unable to find it.  According to a different INE series, nearly half a million foreigners had been out of work for more than a year.  Of this number, more than a third came from regions outside of Europe and Latin America.



Although the flows of migration to Spain are slowing down –according to the latest INE data, only 122,000 foreigners entered Spain to live in 2009, compared to almost twice that number in 2006—foreign workers continue to come.  Presumably, their economic prospects in their home countries are even worse.  Spain still does need their lower-cost labor, in a nation where even unemployed Spaniards are often unwilling to do hard work for low pay.  And more importantly, going forward, a quickly aging nation like Spain needs younger immigrants to fill jobs and help pay pensions.

Spain, along with other developed nations, needs immigration, but it needs to do some serious thinking about immigration and move quickly toward sound policies that match its rhetoric about the world.  One of the best ways to help poorer developing countries, besides allowing free trade with them, is to permit their workers to work in richer countries.  A large portion of migrants´ income flows home to people who need it, potentially lifting them out of poverty.  In contrast to aid, the assistance depends on the effort and initiative of the worker; and it cannot be usurped by corrupt or inept home governments.

If Spain truly believes in solidarity with developing countries, it needs to allow workers to come.  But Spaniards, and Europeans as a whole, may not be prepared to integrate foreign workers in the way immigrant countries like Australia, Canada or the United States have done.  If this is the case, it might be better to work out a clear, well structured program of temporary work so that foreigners can come, stay for a defined time and then return home with their earnings.

New policies are needed.  And almost anything is better than allowing migrants to languish on the streets without work or with only subsistence wages from the black market, and without resources even to return home.
    [post_title] => What to do with a million unemployed immigrants in Spain?
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    [post_modified] => 2023-12-13 13:43:00
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Spain before the crisis had quickly jumped from a country with little or no immigration to the country with the highest immigration rate outside the United States.  Now that the economy and in particular the construction sector have slumped, these immigrants are out of work and often out of income.  What is the right thing to do?

The latest labor-market survey (EPA), for the 4th quarter of 2010, showed that the unemployment rate for native Spaniards was 18.47%, compared with 30.4% for foreigners.  Of an estimated population of 4.7 million working-aged foreigners in Spain at the end of 2010, nearly 1.1 million were looking for work actively and were unable to find it.  According to a different INE series, nearly half a million foreigners had been out of work for more than a year.  Of this number, more than a third came from regions outside of Europe and Latin America.

Seguir leyendo…

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    [post_date] => 2010-05-14 13:45:05
    [post_date_gmt] => 2010-05-14 11:45:05
    [post_content] => Underlying inflation in Spain declined in this month´s CPI report, for the first time since the series started in 1986.  The result highlights the rigidities in Spain´s product markets and could actually be a good sign for future growth prospects, contradictory as it may seem.

The headline CPI rose sharply in April, due in large part to clothing and housing prices.  This could be seen as a sign of returning health for the Spanish economy, though it also points up the same rigidities that have made the crisis so serious.   Housing prices under any economic analysis should decline in a country where oversupply is more than evident and thousands of units stand empty.

The declining underlying figure, however, shows up the demand weaknesses in the segments of the economy that are less regulated and therefore more responsive to market conditions.  Communication, leisure and the tourist-related industries –hotels and restaurants—showed price declines year/year, as did products such as medicines and therapeutical equipment that may be cheaper due to the recent dollar weakness or more competitive markets abroad.

Is this underlying deflation a good or a bad sign?  On the one hand, deflation is a sign of a “sick” economy.  That comes as no surprise:  with joblessness at 20+%, Spain´s recovery cannot be rapid.
But on the positive side, without a currency to devalue, Spain stands little chance to recover competitiveness if it does not enter a deflationary period of some sort.  Although economists fear deflation, Spain and other low-productivity/high-inflation countries in the euro area are treading new ground going forward, as they seek ways to regain competitiveness and stimulate exports to help them grow out of the crisis.  The territory is unknown and not without risks, but deflation concentrated in key export sectors could be Spain´s only chance for an external growth impulse in the wake of the Great Recession.
    [post_title] => Underlying deflation in Spain:  bad news or good news?
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Underlying inflation in Spain declined in this month´s CPI report, for the first time since the series started in 1986. The result highlights the rigidities in Spain´s product markets and could actually be a good sign for future growth prospects, contradictory as it may seem. Seguir leyendo…

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    [ID] => 4511
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    [post_date] => 2009-02-12 11:39:42
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The startlingly rapid fall in employment in Spain and soaring joblessness are pushing the country toward a new crisis: the insolvency of its pension funds.
Demographic trends and high unemployment even in times of expansion have been eroding the solvency of the public pension system in Spain for some time, despite the country´s fast growth and balanced budgets. Low birth rates and rising longevity had left Spain with an old-age dependency ratio of 27% by the year 2000. (The old-age dependency ratio is calculated by dividing the number of persons 65 years and older by those aged between 20 and 64.) The situation was further aggravated by Spain´s relatively low employment rates: only 66% of those who are in working age have a job, compared to 69% in Germany, 72% in the United States and the United Kingdom, and more than 75% in the Nordic countries.
As a result, in Spain the number of working people divided by the number of retirees (population 65 and over) was only 2.28 at the end of 2008. But with job destruction in Spain proceeding at a pace that is almost unprecedented in OECD history, the ratio had already dropped to only 2.23 in January, as 350,000 jobs vanished. If employment continues to plummet at this rate, the ratio would be only 1.74 by the end of 2009. This would mean that there would be fewer than two persons working to pay each pensioner in Spain. To keep the system afloat, either tax rates would have to rise steeply –a measure that would push Spain even more deeply into recession—or pensions would have to be cut dramatically, which would also cause further contraction of consumption.
Without a major recovery in employment, the surplus reserved for the pensions system will quickly evaporate and Spain will begin to borrow to pay pensions. 






    [post_title] => Joblessness will push Spanish pensions into crisis
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The startlingly rapid fall in employment in Spain and soaring joblessness are pushing the country toward a new crisis: the insolvency of its pension funds.

Demographic trends and high unemployment even in times of expansion have been eroding the solvency of the public pension system in Spain for some time, despite the country´s fast growth and balanced budgets. Low birth rates and rising longevity had left Spain with an old-age dependency ratio of 27% by the year 2000. (The old-age dependency ratio is calculated by dividing the number of persons 65 years and older by those aged between 20 and 64.) The situation was further aggravated by Spain´s relatively low employment rates: only 66% of those who are in working age have a job, compared to 69% in Germany, 72% in the United States and the United Kingdom, and more than 75% in the Nordic countries.

As a result, in Spain the number of working people divided by the number of retirees (population 65 and over) was only 2.28 at the end of 2008. But with job destruction in Spain proceeding at a pace that is almost unprecedented in OECD history, the ratio had already dropped to only 2.23 in January, as 350,000 jobs vanished. If employment continues to plummet at this rate, the ratio would be only 1.74 by the end of 2009. This would mean that there would be fewer than two persons working to pay each pensioner in Spain. To keep the system afloat, either tax rates would have to rise steeply –a measure that would push Spain even more deeply into recession—or pensions would have to be cut dramatically, which would also cause further contraction of consumption.

Without a major recovery in employment, the surplus reserved for the pensions system will quickly evaporate and Spain will begin to borrow to pay pensions.