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Spain – Unemployment at record high, 90% of new contracts are temporary

04 April 2012

The number of registered job seekers in Spain rose for the eighth straight month in March to a new record high, government figures showed yesterday. The number of workers officially registered as unemployed climbed by 0.82% from the previous month to reach 4.75 million, the highest figure since the current statistical series began in 1996, the labour ministry said yesterday according to the Times of Malta.

The Spanish economy, the eurozone’s fourth largest, is still reeling from the collapse of a labour-intensive property bubble in 2008 which destroyed millions of jobs. Spain’s economy is expected to contract 1.7% this year, after posting a modest expansion of 0.7% in 2011, according to the government’s estimates.

Figures released in January by the National Statistics Institute, which uses a different calculation method, showed a jobless queue of 5.27 million and an unemployment rate of 22.85% at the end of 2011.

The government expects the unemployment rate – already the highest in the industrialised world – to surge to 24.3% this year. The rise in unemployment makes it harder for the government to meet its goal of bringing the public deficit down to 5.3% of output this year and to within a EU-limit of 3.0% next year as it causes spending on jobless benefits to rise.

To fight unemployment, Prime Minister Mariano Rajoy’s centre-right government passed a new labour reform in February which makes it cheaper and easier for companies to lay people off and cut wages unilaterally.  The government argues the reform – which has been hotly contested by unions – will spur job creation in the long term when the economy rebounds even as it predicts the unemployment rate will rise in the short term.

The unions countered with a general strike last Thursday against the measure which was marred by clashes in Barcelona where youths set fires.

In a separate statement the Association of Large Temporary Employment Agencies (AGETT) stressed how “bad” the employment results were.

AGETT stated that "mild" job creation in March has failed to neutralize unemployment and highlighted the plight of the many unemployed who have never had a job - currently 412,914 people of which 62% are under 25 years.

AGETT also noted that, currently, 90% of the employment contracts signed are temporary and, argues that temporary agencies should have a more active and participatory role in the management of such contracts.

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