Unemployment In Spain Essay

636 Words2 Pages

This article, published in Bloomberg, talks about the rise of unemployment in Spain in the final quarter of 2012, caused by the government’s “deepest budget cut in the country’s democratic history.” Statistics shows us that the number of unemployed people rose from 25.01 percent to 26.02 percent, which represents about 6 million people, in the time period of three months. With the unemployment rate increasing by 1.01 percent, it “has lead Spain to become the third of the euro region’s which unemployed”. The unemployment rate can be defined as the number of people unemployed as a percentage of the labour force. Such an increase can have major consequences on the spanish economy, such as a loss of output, increased benefit spending and social problems.
The unemployed are the people who are registered as willing, able and available for work at the market-clearing wage, but who are unable to find work. Spain’s unemployment situation is also known as cyclical unemployment. Cyclical unemployment arises due to fluctuations in the nation’s business cycle, it can also be referred to as demand deficient unemployment. It occurs when a contraction in private or public spending reduces AD and leads to a fall in national output. A fall in national output can be crucial on an economy as the demand for labour falls and there is downward pressure on wages and prices. Regarding Spain, the government budget cuts therefore explain the rise in unemployment rate over the three month time period. The graph below shows us the situation in Spain.

Due to the budget cuts, we can see that the aggregate demand shifts from AD to AD1, reducing national output, and creating a recessionary gap. As aggregate demand falls for goods and services, firms mu...

... middle of paper ...

...e the unemployment level. Spain could therefore reach their “2012 goal of 6.3 percent of GDP”.
According to Spanish Deputy Economy Minister Fernando Jiminez Lattore, “the concentration of a large part of the budget cuts approved to boost income and cut spendin, as tax on sales was raised and public sector employees’ year-end bonus scrapped.”. The Minister claims such measures were taken in order “to regain investors’ confidence.”. If these measures to in fact work, then in the short run, for Spain’s economy, they will be able to save more savings which can later be used for public spending. However, if it doesn’t, then in the long run, Spain will suffer with a decrease in national output or real GDP, a decrease in tax revenue and a bigger increase in budget deficits which can eventually lead Spain into a deeper recession and an increase in the unemployment level.

Campaign Strategy: Barack Obama vs Mitt Romney
2114 Words | 5 Pages
A key to victory this November is the unemployment rate. According to a Bloomberg National Poll conducted in March 8-11, 42% of Americans consider unemployment and jobs as “the most important issue facing the country right now” (Priorities). Although there has been 24 consecutive months of private sector employment growth, the Federal Reserve suggests that the numbers could fade in the coming months. The importance of creating more jobs cannot be stressed enough. No President in the recent era has been reelected with the unemployment rate above 7.2% (Roth). To paint a picture, in late 1982, the unemployment rate topped 10.8 under Ronald Reagan. However, about 36 months later, the rate dropped to 7.2% percent. The drastic drop in the n...
Read More
The Pros And Cons Of The Great Recession
1272 Words | 3 Pages
Gustman, A. L., Steinmeier, T. L., & Tabatabai, N. (2012). How Did The Recession Of
Read More
UK Vs. Germany Economy and Labor Market
1663 Words | 4 Pages
The labor market entails the relations between the demand for labor, in one hand, and labor supply, on the other hand. Labor demand is defined by the amount of labor firms demand in order to produce certain amount of goods and services. Labor supply refers to the productive segment of the population that is determined by the size of the population. Within the labor market, workers can be classified as either economically active (the employed and the unemployed) or economically active. The employed encompasses people in paid employment or in self employment while the unemployed refers to people who are not working but have actively been looking for job and are willing to start work immediately. A person is classified as economically inactive if they are neither looking for work nor are they ready to start work. The labor force participation and the unemployment rate are major indicators of the health of an economy. This paper will compare the economies of the United Kingdom and Germany as well as their labor market (Shimer 2010).
Read More
Unemployment In Spain Essay
1202 Words | 3 Pages
Spain has a corrupted economy and they have had to put their main focus on their unemployment rate so that it gets fixed fast. “Spain has a dual labor market” that is helping them get back on track with their unemployment but that is not helping everyone (Abend). “The destruction of jobs and the growth of the active population” is starting to grow and stabilize, people are now getting to work again and provide for their family so that they can make ends meet (Abend). “The unemployment rate is affecting the young people more than the older people” (Schuman). “The young people are always scared” to enter the work force in the start of any of their jobs (Schuman). This shows that “Spain is lacking jobs and the lack of experience due to unemployment” (Schuman). The young people are not working and don’t know what it is like to work due to the unemployment rate being insanely high. The government of Spain said “Even during the boom years, when everyone was so triumphant, some of us were saying that it’s not just the quantity of jobs that matter, it’s the quality” (Abend). This shows that ...
Read More
Croatia´s Economy Crisis
909 Words | 2 Pages
...abour market, which decreased their chances of re-employment. Social policy regarding poverty is to aim at preventing short-term unemployment from becoming long-term unemployment. Unsurprisingly, deteriorating public finances resulted in annual deficits and a rise in public debt. Croatia’s general government deficit reached 5% of GDP in 2012, and the overall government debt was 55.5% of GDP. In 2013 the deficit increased to 5.5% of GDP, it reflected feeble revenues, fiscal costs linked to EU accession and the debts of government enterprises. The Croatian Government predicts that the general government deficit will remain above 3% of GDP in 2013-2016; the debt-to-GDP ratio will rise to 62% in 2014 and will continue to increase in 2015-2016. Fiscal policy is now the subject to the European Union’s Excessive Deficit Procedure according to Article 126 of the EU Treaty.
Read More
Unemployment In Canada Essay
903 Words | 2 Pages
As Canadian's fertility rate fells, baby boomers retires, immigration and foreign workers becomes very important for the increase of labor demands in the Canadian's job market. The government is planning to reduce the application waiting time and therefore there will be more newcomers coming in the next fewer years. Canadian companies will then have many experienced and foreign trained applicants where they can help Canadian companies to increase their foreign trade and to build a better relationship with the other country. However, new comers have difficulties in finding employment because of their unrecognized foreign qualifications, non Canadian work experienced and the lack of support in the settlement programs where they get help to find employment.
Read More
Economics Case Study
854 Words | 2 Pages
Regardless of a country’s financial stability and strive to reduce chances of job equilibrium, there remains to be a big number of people not employed. This has mainly resulted from poor economic policies made in different countries. In this case, most of the economists make policies by concentrating on only one group of people. In modern economics, most economists concentrate on the effect of an economic policy on the target group of individuals. For instance, policies that involve recruitment of a particular group of professionals may result to a high risk of unemployment in other sectors if careful evaluation is not taken into consideration. This mainly occurs when these policies target the recruitment of highly paid professionals. Good economists have to be able to determine the effect that would occur on the other lowly paid workers. They also have to project a better means to acquire the money that would be used to pay the new recruits (Chafuen,
Read More
Effects Of Spanish Architecture
1453 Words | 3 Pages
Spain has been hit massively with unemployment, due to the economy collapsing. This could have a detrimental effect on the future architecture within the city, due to a number of things. One problem which may hinder the future architecture may be due to people losing their jobs, many skilled and professional workers may have been made redundant, which will decrease their motivation, and may choose to take early retirement. This means that future projects within the city, may not have as higher skilled workers carrying out work on the project. Another point that could affect the economy, due to unemployment rising, is the workers motivation towards the work they do. If people have been sacked from their work, and then get employed again, they may feel a bit weary towards the new job, and not push themselves to give their very best. This will in turn, effect the output of the work they
Read More
Monetary Policy
607 Words | 2 Pages
The recent tax cuts and interest rate cuts have helped put the economy back on track. He says that the strong growth of the U.S. economy in recent months is neither an illusion nor an accident, but it reflects good monetary and fiscal policy over the past year. He says that there has been a key surge in consumer spending, and that the main reason for that surge was the enactment of the tax cut in early 2001. He also stated that the repeated reductions by the Fed in short-term interest rates supported the expansionary effect of the tax cut. Even though the interest rate reductions were not enough to prevent the recession that began in March of last year, the lower interest rates did stimulate consumer spending through a variety of channels.
Read More
Italy Analysis
1192 Words | 3 Pages
Increased spending usually increases jobs, but since 2007 unemployment has risen from almost six percent to thirteen percent in February 2014. Two major factors in this dramatic unemployment spike are the youth unemployment rate of ages fifteen to twenty-four and the under employment of women. Almost forty-two percent of Italy’s youth are unemployed on top of the even bigger amount of unemployed women at forty-six percent. Some economists think this is due to the growing liquidity problems that many Italian companies are having. One other theory is that the unemployment benefits system is enticing more and more people to work in the black market. While these people work on the black market they are double dipping, as in collecting unemployment benefits from the government while earning a salary off the books. Since Italy’s underground economy is such a large operation, many people especially people over thirty are taking advantage of the governments easily manipulated benefits program. The unemployment benefits program also favors older members because they make up the ma...
Read More
The Pros And Cons Of Education In Spain
1729 Words | 4 Pages
Depending on data from OECD (2015c), there are 26.83% young people aged from 15 - 29 not in employment, education or training and the average data is 15.49%. This means a lot of teenagers drop out from their education or do not have equal educational opportunities. Oppositely, in Finland, the individual is seen as a significant part of the collective society, with duties to reduce inequality and promote the greater common interest. At the same time, citizens also have the right to be entitled to social protection. Although it is better than German which has high relationship between family socio-economic status and pupils ' educational achievement, Fernández Mellizo-Soto (2014) pointed out that it is obviously pupils ' educational achievements are related their background like parents ' social status, income and living areas but researches in Spain are not enough to support these reasons because many data and theoretic are inconsistent. It means the government does not pay much attention to the problem. Otherwise, just like Italy, the problems of the large number of immigrates and the low attendance of vocational training are serious too (Döbert et al., 2007). Moreno Minguez (2013) mentioned that with the grievous attack of economic crisis and soaring enthusiasm of immigration, the rate unemployment for local people in Spain is high. On the basic data of World Bank Seach (2015),
Read More
Unemployment In Australia Essay
1753 Words | 4 Pages
Employment and Unemployment Most Australians, at some stage in their lives, participate in the labour force and receive financial benefits in return. The participation rate of the labour force changes frequently as people constantly join and leave (ABS 2018). According to the ABS- “The labour force participation rate is defined as the labour force (persons employed or unemployed) expressed as a percentage of the population.” Changes in AustraliaIn the past 20 years, Australia’s labour force participation rate has had a slow incline, rising from 60.8% in 1979 to 63.7% in 2002 (ABS 2018).
Read More
Unemployment Rate In Australia
796 Words | 2 Pages
Unemployment refers to a situation where individuals want to work but are unable to find a job, and as a result, labour resources in an economy are not utilised. In March 2016, the unemployment rate within the Australian labour force was 5.6%, however, it slightly increased a year later to 5.8%. Various factors contribute to the unemployment rate’s increase, such as the cyclically weak demand for labour, resulting slow employment growth compared to labour supply. As well as structural influences that affect the efficiency which unemployed workers are matched to vacant jobs .
Read More
Inequality In Spain Essay
754 Words | 2 Pages
...jobs due to reduced capital inflow, as it is riskier to invest in Spain's market. Since investing is so risky, the interest rate that investors have to pay for loans and investment projects in Spain are higher in comparison with other countries from Europe.
Read More
Cause and Effect Essay: Unemployment
665 Words | 2 Pages
The most common causes of unemployment are getting fired and layed off for specific reasons. People might get layed off if a company is going out of business or maybe if there are positions in the company that are no longer needed. It’s difficult to find a job right away after being fired. Companies don’t want to hire someone who has just been fired for reasons such as failure to do a sufficient job, not showing up to work, stealing, etc. It’s also hard to find a job instantly after being layed off. In some cases the economy is down and it is hard to find any work in general.
Read More

Open Document

Wait a second!

Unemployment In Spain Essay

Campaign Strategy: Barack Obama vs Mitt Romney

The Pros And Cons Of The Great Recession

UK Vs. Germany Economy and Labor Market