The Spanish economy is moving away from Europe. It is not that the gross domestic product (GDP) has stopped growing, which it does, but that this increase is mainly supported by jobs with low added value or part-time jobs. The distance between the GDP per inhabitant of Spain and that of Europe has gone from 9% in 2006 to 17% last year. Last week, the Cercle d'Economia put in the middle of the public debate the impoverishment of Spain (and Catalonia) with respect to the euro zone in the last 15 years, which the Bank of Spain certified a few days earlier in its annual report.
The causes are simple: "50% of the gap is explained by unemployment and the other 50% by productivity," reflects Miguel Cardoso, chief economist for Spain at BBVA Research. The paradox is that when registration increases, at the same time the gap with Europe in GDP per capita grows because the jobs that are created have low added value. More wealth is generated in terms of GDP, but each new worker individually produces less than the previous ones, so the average falls.
An easy example is that of the hospitality industry. If new employment is created in bars or hotels, GDP grows in aggregate terms, but the average per inhabitant does not. That widens the gap between Spain and Europe. Another way of looking at the same problem: “In Spain we need more people to produce the same level of GDP as other countries; We have low productivity”, reflects María Romero, an Afi analyst.
But the recovery of the employed is not enough. As Cardoso explains, "in Spain the hours worked have not yet been recovered." In the first quarter of the year there were 20.4 million employed people, up from the 20.1 million at the end of 2008. The problem is that despite having more employed people, the hours worked are almost 20,000 less than at that time. The BBVA Research economist attributes it to the problems of energy-intensive sectors, such as steel, ceramics or cars, which are not at 100%.
UAB professor Josep Oliver warns that we have been tertiarizing the economy for 30 years with unemployment rates that have exceeded 20% on several occasions. "It does not happen in any other country around us," he adds. Jobs in the tertiary sector such as those in tourism services are those that tend to have the most precarious salaries and the least added value. Another element is the entry of immigrants: "Of the families that arrive, half are not employed and those that do are mostly in jobs with low added value." This phenomenon pushes GDP per inhabitant down.
Xavier Vives, a professor at IESE, is one of the members of the Cercle d'Economia board who focused this year's Opinion Note on this issue: “The problem is clearly that the necessary structural reforms have not been carried out to raise productivity. At Fedea, the director Ángel de la Fuente believes that the basic reasons are difficult to discern, although he points out that "I have the feeling that things are not being done well and the government's reforms are not the most appropriate." From London, Ángel Talavera, from Oxford Economics, believes that "the production model in Spain will hardly allow it to converge with Europe in GDP per capita beyond 90%."
Most of the economists consulted are of this opinion and believe that what happened in the 2000s when Spain approached Europe was a mirage as a result of the real estate bubble and the madness of the billet, which shot up employment and left the rate unemployment at such low levels not seen in many years. In 2007 it reached 7.9%.
“That impulse of the 2000s was false, since it was supported by a huge debt and real estate, which is a job with low added value,” says Oliver. The UAB professor calculated that 45% of GDP gains between 1998 and 2007 were thanks to immigrants.
In the chapter on solutions, the opinion is unanimous and it involves reinforcing education in such a way that supply and demand are adequately matched. "Companies cannot find and students study things that are not in demand," says Cardoso, who calls for more investment. "Spain invests the same as Austria in training the unemployed when here there are three times as many unemployed," he adds.
In any case, it is surprising that this lack of convergence with Europe is not a regular topic of debate and everything revolves, instead, around employment data or GDP growth. “We are all subjected to the systematic propaganda of the governments”, says Vives.
