By the reckoning of  number of economists, Spain’s number of unemployed reached six million late last year.  Although the means of measurement are different, the figure contrasts with a number of 12.2 million in the U.S. as of December. An indication of how deep the black hold is, and how hard it will be to escape is that Spain has a population of 46.8 million. America’s is over 315 million.

Spain’s problems are made worse by at least two factors. The first is that its economy lacks diversity, and the damage done to its largest industries by the recession is considerable and perhaps permanent. The financial systems has been decimated by write-offs, some large portion of them due to overbuilding. That in turn has pounded construction employment.

Spain’s other large industries include auto manufacturing which faces a multi-decade low in Europe, and tourism, which may be able to hold its own as major economies outside Europe recover. Spain has almost no work in one of the world’s largest employment sectors–energy. The nation imports virtually all of its oil and gas.

Spain’s second, and probably more severe problem, is that the weight of austerity brought by high debt and deficits mean it could be years before the country can marshal any resources at the national level to help stimulate any part of the economy which could add considerably to fill the eroded jobs base.

With its largest trading part–the EU itself–in deep economic trouble, Spain’s recovery will probably take the better part of a decade.

Spain’s unemployment rate of 26%, if duplicated in the U.S. would mean 40 million Americans out of work.

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.