Despite a high economic growth rate, Spain's two-year downward trend in unemployment came to an end in the first quarter of 2004. At the same time, the active population is increasing due to immigration and more women joining the labour market. Over 2002-4, the purchasing power of wages has fallen due to inflation.
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Despite a high economic growth rate, Spain's two-year downward trend in unemployment came to an end in the first quarter of 2004. At the same time, the active population is increasing due to immigration and more women joining the labour market. Over 2002-4, the purchasing power of wages has fallen due to inflation.
On 27 April 2004, the National Statistics Institute (Instituto Nacional de Estadística, INE) published the latest unemployment figures. In the first quarter of 2004, the number of unemployed people rose by 37,100 in comparison with the previous quarter, and a total of 9,400 jobs were lost. The number of unemployed rose to 2,164,100, which represents 11.38% of the active population. Furthermore, unemployment in the most dynamic sectors of the Spanish economy - services and construction - increased by 4.7% and 4.6% respectively. The loss of employment affected men more than women, though women's unemployment rate is 15.7% compared with 8.3% for men.
Unemployment fell by 18,500 in 2003, and had not risen for two years until the first quarter of 2004. The downward trend in unemployment has thus been broken (ES0311103N).
The active population is still growing, and reached 19,019,700 persons in the first quarter of 2004. The labour market participation rate rose from 48.2% in 1997 to 55.3% at the end of 2003. One of the constants of the Spanish labour market is a continuous growth in the active population as a consequence of more women joining the labour market and an increasing number of immigrants (ES0401204F). In other words, commentators believe that the continuous increase in labour supply may be one of the main causes of unemployment, in addition to the loss of jobs and the relocation of the operations of some multinationals (ES0402205F).
A chronic feature of the Spanish labour market is the persistent high temporary employment rate. However, in the first quarter of 2004, the temporary employment rate fell by 0.5 points to 30.1%. A reduction in the temporary employment rate is one of the goals shared by the new Socialist government which came to office in April 2004 (ES0405202N) and the trade unions.
Inflation rose by 0.7% in March 2004, which represents 35% of the total inflation forecast for the whole year. The year-on-year inflation rate is 2.1% so far in 2004, the General Workers’ Confederation (Unión General de Trabajadores, UGT) stated on 15 April, based on INE sources. The inflationary pressure has been caused by the prices of oil, clothing and footwear, and in the tourist sector and hotels and catering. In the last two years, wages have lost purchasing power by about 0.8 points. Finally, GDP rose by 3% in the first quarter of 2004.
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Eurofound (2004), Unemployment and inflation rising, article.
