Spain cracks down on black economy as jobless rate tops 21 pct

Published April 29, 2011

EFE

Madrid – The Spanish government approved a plan Friday to crack down on underground employment, the same day newly released unemployment figures showed the ranks of the jobless approaching 5 million people, or more than 21 percent of the workforce.

Labor Minister Valeriano Gomez said the goal of the plan is to regularize and control the black economy.

Underground employment in Spain accounts for close to 82 billion euros ($121.4 billion), or nearly 8 percent, of Spain's annual gross domestic product, according to Finance Ministry figures.

The Socialist government's plan gives business leaders until July 31, 2011, to voluntarily regularize members of their staff who are currently off the books. After that date, the fines for violating the law will climb fivefold.

Companies that bring their staff into legal compliance will avoid sanctions but they still must pay the Social Security obligations they had been skirting, the labor minister said Friday, adding that "there will be no amnesty."

The unveiling of the plan coincided with news that the ranks of the unemployed reached 4.91 million in the first quarter and that the jobless rate rose almost one percentage point to 21.29 percent, according to the EPA workforce survey released Friday by the National Statistics Institute.

The jobless rate is at its highest level since early 1997, while the total number of unemployed is the highest since these statistics began being kept in 1976.

Another worrying figure that emerged from the EPA survey indicates that the number of households in which all members are unemployed rose by 58,000 in the first quarter of 2011 to nearly 1.39 million.

The unemployment rate among Spain's large immigrant population has risen to almost 32 percent.

In Spain, the job destruction associated with the global recession was exacerbated by the end of a decade-long property boom that had made the country the envy of most of Madrid's partners in the European Union.

At present, the unemployment rate in the Iberian nation is the highest among the 34 mostly wealthy countries belonging to the Organization for Economic Cooperation and Development.

Asked about the high unemployment rate in the first quarter, Deputy Prime Minister Alfredo Perez Rubalcaba described the situation as "very bad" but said the jobless rate had peaked.

For his part, the leader of the conservative main opposition Popular Party, Mariano Rajoy, pledged that if he is elected prime minister in 2012 he will take decisions that generate confidence and promote job creation.

Spain's biggest labor federations, the CCOO and UGT, also lamented the new data.

The secretary general of the CCOO, Ignacio Fernandez Toxo, described the figures as "crushing" while UGT colleague Candido Mendez said a government-sponsored labor overhaul last year had failed and that Spanish society is "gripped by uncertainty."

The overhaul was supported by Spanish employers' associations and international agencies such as the IMF, which had contended that Spain's labor laws were too rigid and discouraged companies from taking on new personnel.

But the labor federations say the overhaul, which among other things reduced severance pay entitlements, only made it cheaper and easier for employers to dismiss workers.

The enormous anxiety prompted by the nation's high unemployment also was reflected in the latest survey by the Sociological Research Center.

According to that poll, 82.8 percent of the population views unemployment as Spain's biggest problem and 78.4 percent considers the country's economy to be in "bad or very bad" shape.

http://latino.foxnews.com/latino/money/ ... ps-21-pct/