Our unemployment rate remains at an unacceptable high level. Too many have lost their jobs and few new ones seem to be coming on stream. The Obama administration now says it has spent over half of the funds in the famous “Stimulus Plan.” But this has not changed the bleak employment picture much. There is now talk of a second “Stimulus Plan,” which has about as much chance to get though the Congress as the proverbial snowbell transiting hell.
If unemployment is bad in the USA, it is worse here in Spain, where the unemployment rate is twice that of the USA. And the Spanish government has shot its bolt trying to overcome the malaise.
Unemployment has for many years been higher in Spain than in the USA, or the rest of Europe, for that matter. The reason posited for Spain being able to continually function with a high unemployment rate is that there is a large “black economy,” or unrecorded economic activity. Many of the apparently unemployed are actually employed in this “underground” economy.
I now read that the research service for the combined Spanish labor unions maintains that the “black economy” accounts for 30% or more of the country´s real GDP. The research group bases its estimate on its understanding gained over the years that the contribution from the “black economy” to the GDP runs at a rate of about 2% for each 1% of the unemployment rate. Thus its current estimate is that a 15-17% unemployment rate means a contribution to the economy of at least 30% GDP from the “black economy.” Obviously this is a very dicey estimate.
The suggestion that many of the unemployed in Spain may very well be employed in the “black economy” may ease the pain somehat. But there is the same widespread discontent about the job market here, as in the USA. If job prospects do not improve soon, this anger will give rise to demonstrations and political action.