Yes, this is one of those doom and gloom articles that I sometimes feel compelled to write. Believe me, I wish circumstances were different but it’s difficult feeling positive for Spain at the moment.
The reason for writing this today is mainly that on reflection on what was supposed to be a big event in Madrid on Monday just gone (24 January 2011), I’ve been left feeling very confused...and yes, I know that’s quite easy.
The National Association of Unemployed in Spain had arranged a peaceful demonstration in Madrid. The plan was to form the longest queue of unemployed people in the world to beat the previous Guinness Book of World record. It was supposed a 5Km long queue ending at the Palacio de la Moncloa, the official residence of the Spanish Prime Minister, Jose Luis Rodriguez Zapatero. They needed around 4,500 people to turn up to complete the queue.
Now, considering there are over 4.5 million people officially registered as unemployed in Spain, it appears that only around....get this....80 people turned up for the protest. Yes, that’s not a typo!
Consider also that the Spanish Prime Minister recently announced that as of February they will be getting rid of the €425 long-term unemployment benefit, you would think the protest would have had a considerably higher turnout.
Come next month, many unemployed will literally have no income whatsoever.
Or maybe they will...
The failure of the protest to draw more people in to support the initiative is at first slightly difficult to comprehend. If it had affected me and I lived in or around Madrid I would probably have gone along. I’m all for peaceful protests, just not so keen when it all gets nasty!
So what kept people away?
I found some possible enlightenment when reading some of the comments left by readers of this particular news story on the ABC website.
One commenter going by the name of Prieto put it like this:
“I think that the supposedly unemployed are in actual fact working, so how were they going to justify their absence? We are the world champions at this. They should have done it in the afternoon when more people would have turned up.”
Another commenter, Pedro, asks:
“where were the representatives of the trade unions?”
A highly publicised event against not just the growing unemployment in Spain but also the ending of the long term unemployment benefit, yet no trade unions officials turn up.
I’m definitely missing something here.
Going by what Prieto wrote, although there are 4.5 million registered unemployed, there are in fact many of those people working for cash, and I think there is some truth in that comment.
I remember when the government introduced a €400 “unemployment benefit” for self employed people. The condition was that you would have to attend a training course 2 or 3 times per week to be able to claim this. Out of the initial 12,000 places available only around 4,000 were filled. If I’d not been earning any money back then I would have taken the €400 and attended the training courses. After all, something is better than nothing.
But at the time the feedback was that people couldn’t claim this money because they were actually still working but for cash only. They were no longer paying social security or their gestor (accountant) cost to save whatever they could...but they were still working.
The whole unemployment situation is therefore very badly distorted in Spain. Spain has and still is in many ways a very cash-based economy. Whereas before the country managed to function well and grow like this, today it’s a different story.
It’s not all good.
Even though many of the unemployed may actually be working, it’s not necessarily good news for the country.
Less officially employed people means less taxes and social security income for the government. It also means they may also be paying out the unemployment benefit to these people at the same time.
The government is taking less and giving out more. There is little incentive for businesses to employ people as it’s so expensive and then very difficult to actually fire or lay off anyone when times get tough. It’s also expensive to be self-employed.
So until we see some drastic changes from the government to make it easier for businesses to hire and fire and make it cheaper at the same time, I see the situation only continuing to worsen.
The only positive thing at least is that out of the 4.5 million unemployed, it seems many may still be earning some money and are able to survive, which really is some comfort in these toughest of times.