In this second episode talking to writer & journalist William Chislett we look at current economic, societal and political problems that Spain is dealing with and the future challenges the country faces.
Listen to this episode free on the player below or on your favourite podcast app.
William talks us through issues with the education system, stubborn unemployment, the Spanish economy, pensions and the implications of the EU’s €140 billion pandemic recovery fund that Spain is set to receive.
William is a former Madrid correspondent for the UK´s Times newspaper. He was based in Madrid and reported first-hand on Spain’s transition to democracy from 1975-1978.
He even interviewed King Juan Carlos. He subsequently worked for the Financial Times based in Mexico covering Central America, before returning to the Spanish capital in 1986, where he still lives.
The points we cover in this episode are:
EDUCATION
Among the problems of Spain’s education system are endless reforms, which in practice have changed little, learning based excessively on rote learning as opposed to critical thinking.
Spain is not producing the skills it needs or will need in the future.
A big share of jobs requiring either very low levels of education or very high levels. The share of all jobs requiring only a primary education is higher in Spain (25%) than in any other OECD country; however, the supply of low-educated workers exceeds demand.
At the other end of the labour force, Spain faces high over-qualification and field-of-study mismatch. Rising educational attainment has created a large supply of highly-qualified adults, but many of them are working in jobs for which they are over-qualified
PENSIONS
Spain’s pensions system is unsustainable and headed toward a crisis. (toxic mix of the retirement of the 1960s baby boomers, high and rising life expectancy (one of the highest in the world at 83 years) and one of the world’s lowest fertility rates (1.25), what is called the dependency ratio.
EMPLOYMENT
Unemployment rates are stubbornly high, although they have reduced from an eye watering 26% in 2013 to around 15 percent, but that’s still very high. And the story is even worse for Spain’s young population between 18-24 where the rate stands at 30%. This is largely due to younger people studying at university, but another problem is that Spanish students take longer to obtain degrees that in many other European countries, many still studying well into their mid-20s.
Overall, around 25% of jobholders are on temporary and thus precarious contracts. The dual system of ‘outsiders’ (those on temporary contracts) and ‘insiders’ (those on permanent contracts) is one of the hallmarks of Spain’s dysfunctional labour market.
Among the EU Member States, more than 1 in 4 employees were in temporary employment in Spain (26.9%). (2018)
The mentality that a state/government job (funcionario) is still seen as the ‘dream job’ with cushy conditions, generous pensions and salaries and almost impossible to be fired from
In 2006 56 % 56 percent of Spaniards between the ages of 16 and 30 wanted a government job. which feeds a lack of economic dynamism and entrepreneurship.
The abusive over-dependence on long-term low-paid or ‘no-paid’ interns and ‘fake freelancers’ to avoid social security payments.
Between 2007 and 2016, the general government workforce with permanent contracts expanded by 6.3% (130,000 persons) The public sector bloated, with around 1.5 million people on the state payroll.
ECONOMY
The lack of diversity in the Spanish economy with dependence on Tourism (12% of GDP) and the country’s addiction to building. Spain’s economic model, heavily based on labour-intensive construction and tourism and not very productive, is also part of the unemployment problem as it does not provide jobs on a sustained basis.
COVID-19 & the EU’s recovery fund
Spain is set to receive €140 billion divided between grants and loans over the next three years as part of a pandemic recovery fund. The government has to send to Brussels in October 2020 its programme of reforms and how it plans to invest the money. Is this an opportunity for Spain to reinvent itself economically and push Spain to diversify its economy?
William Chislett
William has written numerous books on Spain including, Spain – What Everyone Needs to Know and he writes a monthly article called Inside Spain - A lively look at Spanish current affairs - for the Elcano Royal Institute think tank. Well worth reading if you´re interested in Spanish politics.
William´s work can be found at https://williamchislett.com/
Also William has a new book out, MICROHISTORIA DE ESPAÑA which is an updated and extended edition of Spain - What Everyone Needs to Know. The new edition is published in Spanish.
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