The jobless figures are at an 18 year high after the latest figures show unemployment to be at 24.4% or 5.6 Million people out of work. Unemployment is now the focus of a debate in the country as policymakers worry about the effects of the collapse in consumer spending, a drop in tax receipts and spiralling bank debts.
Government policies have reformed labour laws and made it easier and cheaper to sack employees. Some 374,000 jobs were lost in the first three months of this year, representing an estimated loss of £778 Million in income tax receipts. The new laws have been partly blamed for this situation.
In four of the countries autonomous regions jobless rate is over 30%. Across the country 52% of under 25’s are out of work, leaving 1.72 Million households without a single member in work. Of Spain’s 47 Million residents only 17.5 Million are in work.
Spanish banks are suspected of disguising billions of euros of bad debts on their books after a property price collapse wiped more than 60% off the value of homes in some areas. Many families have maintained mortgage payments during the crisis but a steep rise in unemployment has sent the number of bad debts souring.