Spanish architect Carmen Muñoz has worked steadily since graduating from college nearly 20 years ago. But March 6 found her waiting in line at a Madrid unemployment office; the day before she had been fired from her job with a real estate development firm one more casualty in a crisis that has made Spain's unemployment rate, at over 14%, the highest in the European Union. "It's the construction industry," she says in a tone of both anger and resignation. "What can you do? They don't have any work."
As a woman and a worker in the housing sector, Muñoz could be the poster child for both Spain's spectacular economic rise and its equally dramatic decline. In the 10 years to 2006, Spain's real growth averaged 3.7% (compared with 2.1% for the rest of the euro zone), thanks in large part to a booming construction industry that at one point accounted for as much as 18% of GDP. That growth helped expand Spain's workforce from 13 million in 1990 to 20 million, due largely to a huge increase in the number of women and immigrants employed. By 2007, a country that had for decades suffered an unemployment rate of 20% or so had cut it to 8.6%. (See pictures of unemployment hitting the U.S.)
But with the economy shrinking a projected 1.6% this year, jobs are vanishing even faster than they were created. "Unemployment consists of two factors," says Carmen Alcaide, former president of Spain's National Statistics Institute. "The destruction of jobs and the growth of the active population. In Spain right now, we have both."
Yet if Muñoz is the obvious face of both Spain's boom and its crisis, Ernesto, who was filing for benefits the same day, is their hidden one. The 40-year-old has worked for the past 17 years as a salesman, but always on a temporary contract. Now his employer was letting him go, though with a promise to take him back in a few weeks after it "restructures."
"Spain has a dual labor market," says William Chislett, of the Elcano Royal Institute, a Madrid-based think tank. "On the one hand you have these extremely protected permanent jobs, and on the other, the highest rate of temporary employment in the E.U." (Read: "Five years after the Madrid bombings.")
Roughly 1 in 3 Spanish workers has a temporary contract and so is easier, and less costly, to fire. "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 matters, it's the quality," says Alcaide. Ernesto would agree. The father of two, who did not want to give his last name for fear of alienating his erstwhile employer, said his new contract agreement would require him to work seven days a week. "But what can I do?" he asked. "With the crisis, I don't have a choice."