This morning, the people I work with in Spain were informed that there would be cut backs in the next month. Approximately 1/3 of the workers in Spain whom work for the same company as I do will lose their jobs. I know that for most of you reading from back in the states, this is probably a common “dinner discussion” topic. One thing to note before I get into further detail is that it is very uncommon for companies in Spain to make such significant cut-backs (compared to a few people being fired here and there). This caused the tension in the office to be very high…luckily I’m considered a student and not an employee or some of that tension would be directed my way.
Late last month, the unemployment rate in Spain was determined to be 17.4% and I have heard that within the next year, the unemployment rate will be above 20%. Compare that to the unemployment rate of the United States, which is currently 8.9% or the state with the highest unemployment rate in the US currently (Michigan – At least we are #1 at something!?!), which clocks in at 12.9%. As most of us know, the economy is not well (I will leave the details out for sake of length haha). Knowing that the unemployment rate is a good way of judging an economy, imagine the economy if the unemployment rate in the US or even just in Michigan was as high as it is in Spain (that is 2 times and 1.5 times the current percentages respectively).
But I regress…Back to Spain – Surprisingly, the reasons for the poor economy are not so different from those of Michigan. I was told (in Spanish of course, so I apologize if I didn’t catch all of the details) that there are three main causes for the current economic situation Spain is having.
Construction – The main cause of the poor economy is that Spain is very heavily involved in construction and for the past few years the industry has been booming. However now, nobody is purchasing/renting buildings or apartments so the industry has crashed. What this does is cause several problems; those construction workers whom used to be working around the clock to build the newest apartment complex, strip mall, etc. are now unemployed. The other main problem it causes is that it floods the market with property, driving down the prices of all property and land (yet no one has money to spend because they are unemployed…spiraling black hole of economic failure). Sound familiar – notice any freshly built unoccupied buildings near where you live lately? Or have to listen to your parents complain how they are stuck in Michigan for the long haul??
Tourism – A major source of revenue in Spain is tourism. Due to the fact that the economy of the entire world is hurting, people are not spending money and traveling as much as they usually do.
Automotive – Spain is heavily involved in the automotive industry (this was all new to me); some parts more than others. The auto industry in Europe is similar to the global auto industry/economy. This is one of the main reasons for Michigan being “ahead” of the unemployment game, because as a state we are very concentrated in one industry and when that industry took a big hit, we felt the majority of the blow in a sense.
For a more positive/uppity ending (because I don’t want anyone to feel bad after reading any of my posts), listen to and watch the video below it will surely bring a smile to your face… 🙂
Filed under: Work |
A Spartan in Spain 
I’m sure you didn’t expect a post from me but I just happened to be surfin’ the web when I noticed your blog. Great job ! What was your inspiration for this? Do you get any school credit , a way to pass the time, a travel diary ?
Could do with some more tails of drunken debauchery but I guess comparative economic and macro societal trend analysis will have to do for now. How do you like that you travel thousands of miles away and end up back in Michigan.
On that note, you are getting a first-hand close-up look at the realities of a socialist economy which the good ol’ USof A seems to be all-to enamored with these days. Make it too comfy for people to not work hard for a living and you get the kind of results you site. Any student of Ayn Rand would tell you that once you remove the incentive to be productive you get the results Europe has been suffering. Again, we are trending in that same direction and are in jeopardy of losing that entreprenurial fire that has fueled our development for the last 200 years. Look at population trend numbers and you will see that European countries are losing population at an alarming rate. Lots of economic ramafications of that . Fewer younger working people people footing the bill for increasing amount of elderly. Sound familiar ? – it’s our social security situation here in the states.
On a much lighter note, what about them Wings. 4 wins from the Cup.
Good information…I believe the reason with regards to Spain on some of the points you made could be heavily tied to the rule of the authoritatian dictator, Francisco Franco (1936 – 1975). Franco was known for the oppression of the people as well as his strong views on autarky and nationalism to name a few.
If you’d like to read a little more about Franco, I recommend checking out his wikipedia page – http://en.wikipedia.org/wiki/Francisco_Franco
As for the reason behind this blog – the answer is ‘yes’ to all of the above. I started this as a project for the independent study I’m currently taking than I figured if I have to do it anyways, I might as well make it something interesting and enjoyable for me to do as well as something my friends and family can keep tabs on things I am doing.
I haven’t been able to catch any of the games here. Whats the status? And the tales of debauchery will come later…don’t fear.
-Kevin
I enjoy your perspective on this particular issue. On a related note, television in DC is flooded with–ironically enough–‘Pure Michigan’ commercials. My friends/fellow interns here were asking me how things are in Michigan (apparently the media [somewhat accurately] makes Michigan seem like an icy, jobless hellhole) and it got me thinking about economics and whatnot. Interesting to see Spain has similar issues…
Kevin, I hate to say it but after the GM bankruptcy announced today, unemployment in michigan is going to go up, some, although probably a little radical, predictions predict Michigans unemployment rate to be up to 20% by next year. Sounds like you’re going through the same thing in Spain as we are back here.
Miss you!
20% does seem a little on the radical spectrum. I have been reading a lot about the market and economy lately and it seems that many analysts are optimistic about the economy taking a turn for the better. It won’t be an overnight change obviously, but within the next 2 to 3 years they are predicting that we will be completely out of the current recession we are in.
Time will tell what will become of our economy as well as the global economy in the next 5 years. I am very interested to see where we will stand in relation to other nations and their economies. In my personal opinion, I believe that in the next 5 to 10 years there won’t be a “superpower” nation and that the global economy will grow and strengthen ten-fold compared to that which it is today. What is your opinion on the matter?
-Kevin