An Irish Professor residing in Madrid and teaching in business schools once said to me that Spain is the best country for living and the worst for working. Although he was obviously taking into consideration the labour markets of developed countries, particularly the ones in Western Europe, unfortunately he had a point on that.
Unemployment skyrocketed after the 2007-2008 economic crisis reaching almost 27% in 2013 (from below 8% in 2007). Fortunately, the situation has improved in the last years and the current level (June 2017) is 17.7% per the latest indicators from the Ministry of Employment and Social Security, a significant increase in the number of people legally working but still distant from the Euro Zone’s average unemployment rate (9.3% in June 2017).
Other negative factors of the Spanish Labour market related to that rate are high unemployment (38.6%) among the youngsters (less than 30 years old), low salaries, and temporary jobs (92% of the total signed contracts in June 2017 were of that type). The latter number is highly influenced by the peak of the tourism season, as I also commented in the Best Timing to Move to Spain post, in which it was commented how the chances of finding a job are influenced by the importance of Tourism industry in the Spanish economy and the seasonality it brings into our labour market.
To finish with the bad side of this overview, the weight of the ‘under the table’ labour market must be mentioned: a considerable amount of people (both legal and illegal residents) work without a contract or at least receive part of their salaries undeclared to avoid paying taxes for that amount to “Hacienda” (the Tax Office). It obviously has a huge negative social and economic impact: up to date, the Spanish General Council of Economists Council estimates that the underground economy accounts for around €25 Billion per year (16% of the GDP); and in 2016, the Spanish Association of Temporary Work Agencies calculated that around 4 million jobs (18% of the active population) are linked to the underground economy. As an example of all that, I am aware that many English teachers coming outside the European Union start working in an irregular manner here.
Naturally, there are also labour opportunities in Spain. Although the tourism industry and teaching English are the main occupations for new (and not so) comers, because of the globalisation and the need to diversify due to the still not-so-distant financial crisis, many companies seek to serve markets in other countries and are hiring employees for that purpose. In our Job Search section of our Resources area, you can have a view of websites that post job offers with international people in mind.
If you have an entrepreneurial spirit, there also ways to be explored. Besides addressing the needs of foreign residents, since there are many individuals from other countries established (or willing to do so) in Spain, recruiting them to build an international business can be easier than in other locations, not to mention that salaries are also lower. That is also a reason why many multinationals have chosen Spain to establish hubs to serve other markets, mainly within the European sphere.
Location-independent freelancers (“autónomos”) can also work a good part of the time in Spain while taking advantage of our good transport links to Europe and America while also paying less for certain expenses, and surrounding themselves with peers in a similar situation.
Another positive development in the last years is the establishment of research centres of companies like Amazon and Ryanair in this country. Although they are again taking advantage of lower salaries, they are also taping into the Spanish engineering talent, a significant part of it having had to go abroad because of the 2007-2008 crisis and almost always willing to come back home. Since in this type of centres English is the communication language, skilled individuals from other countries can apply to their job openings.
We will come back to this topic. Meanwhile, what is your view on the Spanish labour market? Any experience to be shared? What is your outlook on it?
Links of Interest
El Mundo. España encabeza la reducción de paro en Europa pese a seguir líder en número absoluto de desempleados
El Economista. España tardará aún cinco años en volver al empleo precrisis con el PIB previsto
El País. Spain losing €26bn in tax revenue due to fraud, says economists’ report
ABC. La economía sumergida mueve más de cuatro millones de empleos
Invest in Spain. Amazon chooses Madrid for its software development center
Expansion. Ryanair estrena hub tecnológico en Madrid
Photos: Sagrada Familia, Barcelona. Cashbox. Freelancer writing a business plan.