The pain in Spain: On May Day, nearly 1 in 5 are jobless, but few seem angry

In Madrid, the workers' day was marked by samba dances, not brick-throwing.

Patricia Cinta
Organizers estimate that about 65,000 marched in Madrid on May Day.

As most of the world observes May Day amid the worst recession since the Great Depression, perhaps Spanish workers have the most to protest and worry about.

Unemployment here has nearly doubled over the past year to 17 percent – the highest in the European Union and double that of the United States. The economy is shrinking at its fastest rate in 50 years.

Conditions are expected to worsen, yet there's little indication that Spain will be plagued by the social unrest that's heating up elsewhere in Europe.

The governments of Hungary, Latvia, and Iceland have already collapsed after angry protests over the handling of the economy; France has thrice been disrupted as millions staged nationwide strikes. And demonstrations – sometimes turning to riots – in Greece, Ireland, Britain, and several Eastern European countries have reminded the continent of the violent class struggles of past century.

The Spanish government, however, remains strong. No national strikes or protests have taken place, and the mood in the street is somber, but not angry. Indeed, the 65,000 people who organizers say partook in the traditional May 1 demonstration in Madrid danced and cheered to a samba beat as they chanted slogans demanding more jobs.

Judging from the festive mood, it's tough to imagine that unemployment is the most pressing concern for three of every four Spaniards, according to the government's statistic agency. So, why has Spain remained so calm?

"They are cowards," offers Santos Alonso, a retiree. For decades, he has marched each year in the May 1 parade. "Young people need to react, or else we're not going anywhere." [Editor's note: The original version misspelled Mr. Alonso's surname.]

Another man playing the anthem of the Second Republic on his harmonica – a tune that dates to the days when Spain was ruled by a coalition of anarchists and communists before the Civil War – suggests the relaxed atmosphere is inherent in Spanish culture. "It's our idiosyncrasy," he says.

Many jobless are immigrants or elderly

Spaniards might not be throwing bricks, but there is a growing impatience here to see changes made to provide more economic security down the road.

Currently, 4 million in Spain are unemployed Spaniards – with nearly half losing their jobs in the past year. Almost two-thirds of Europe's job losses in the last year has come from Spain.

By 2010, some forecasters expect 5 million people to be jobless. One million families have no source of income. And unemployment benefits are small and short-lasting, compared with other European countries.

"Spain is not a country in which public frustration is expressed with marches and demonstrations, like France and Greece," says Florentino Felgueroso, an economics professor at the University of Oviedo and a researcher in the independent think tank Applied Economics Research Foundation, Fedea.

Professor Felgueroso, who coordinates a multidisciplinary program of labor experts that is proposing measures to boost employment in Spain, cites several factors contributing to the passivity. Many who have recently lost their jobs are immigrants, who shy away from confrontations, or elderly people who have taken early retirement, he says. Another large segment of the jobless is young people, who are cushioned by a family safety net.

Spain's working class also has historical ties to the ruling Socialist party, Felgueroso says. The party of President José Luis Rodríguez Zapatero was born at the beginning of the previous century out of the trade union movement.

"It's not the government's fault," says Toni Ferre, a coordinator of the union organization in Spain that claims to represent 80 percent of all employees.

Growth fueled by housing bubble

Staggering unemployment rates are not new to Spain, either. It was only after 2001 that jobless rates fell to the single digits. Those economic gains are viewed as largely superficial – the tourism and holiday home construction industries have been particularly vibrant – and to a large extent fueled by funds from the European Union.

Until the recent slowdown, Spain has had one of the fastest-growing economies of industrialized nations. Unlike Germany, France, and Britain, however, Spain has never developed a strong export market.

Spain's economic gains were based on a housing boom. More homes have been built here in the past few years than anywhere else in Europe. In fact, in 2007, the country built more than the rest of the continent combined. That required cheap labor, which was largely supplied by immigrants. In the meantime, Spaniards – like Americans – speculated on what they hoped would be an ever-rising real estate market, Felgueroso says.

When the bubble burst last year, builders started shedding jobs by the thousands. Many were temporary jobs and did not affect native-born Spaniards, Felgueroso says. Most industrial jobs, except for some in the automotive industry, have so far been largely protected.

The real estate-fueled economic growth model has been discredited, but the country has yet to embark on the drastic structural changes that, economists say, are necessary to provide long term solutions.

"We were a model to follow. Now we are the opposite," Felgueroso says. "It's as if we use to eat seven meals a day and now we are fasting."

Many want to emulate the export-driven countries of northern Europe, where more investment is devoted to research and education. But adopting such changes will take years, which explains why Spain's recession may be more profound and take longer to recover.

Meanwhile, Spain's relaxed approach to the recession could change. Social unrest is "on the horizon," the leading newspaper in Spain said in a recent editorial.

"If officials and companies don't put an end to the bloodshed of jobs, we will react decisively," says Mr. Ferre, the union leader.

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