The unemployment rate in Spain has risen to 27.2 percent, according to the National Statistics Institute in Madrid. This is compared with 26.02 percent in the previous three months. For those under twenty five years of age the rate is an incredible 57.2 percent.
The economic collapse in Spain is now quickly approaching the dire situation that Greece is facing, as you can see from the chart. Six million people are now without jobs in Spain. Ricardo Santos, a euro region economist at BNP Paribas SA in London, said the overall unemployment rate could even reach twenty eight percent by the end of the year. The rate of increase in unemployment is accelerating.
The Spanish economy suffers from a very over-regulated employment market making it risky for employers to take on new workers. Added to this is the generous unemployment compensation, which is paying people not to work.
A heavily unionized economy coupled with regulations making it nearly impossible to fire workers of course is contributing to joblessness, as it makes it too risky for employers to take on new workers for fear of lost revenue should their business need to downsize.
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