Unemployment in Spain has hit an historic high of 5,778,100 jobless workers. This number is just over 25% of the working population, meaning one in every four able bodies is without gainful employment. The number of people working (17,320,300) has shrunk to 2002 levels. These results show that unemployment is still Spain's biggest problem, but also suggest that we analyze some important changes that could mark a turning point in the country's deteriorating job situation.
The most important change is slowing job losses in the private sector even though in the public sector they continue to disappear. Throughout the crisis, both private and public jobs reports have been erratic. As companies try to cut costs by reducing payroll, Public Administrations continue to hire even though this increases their deficit spending. But the situation is changing. Private sector jobs dropped only 500 between Q1 and Q3 of the year when last year they fell by 30,100 during the same period.
In the Administrations, a year ago 34,700 jobs were created and now 112,400 are being cut. This also explains the increase in unemployment affecting women, who hold the majority of public sector jobs.
The government has yet to carry out a labor reform that would cut 120,000 jobs to reduce the hiring bonanza that occurred between 2007 and 2011. Yesterday the government announced that it would create a committee to reform the public sector, which would finish its work by the end of June. This time frame is too long for a reform that ought to have been put in place months ago because of its bearing on jobs and public finances.
