Spanish Unemployment Cost and Housing market Support

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This topic contains 8 replies, has 5 voices, and was last updated by Profile photo of Anonymous Anonymous 6 years, 5 months ago.

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  • #55722
    Profile photo of Anonymous
    Anonymous
    Participant

    I am the host for several months for a Spanish friend who wishes to improve his job prospects by living and studying in the UK in the hope that his English will improve.

    He has been receiving unemployment benefit in Spain for almost 2 years now and he currently receives 1,100 Euros a month, which I believe is the maximum you can receive. He owns a few properties and has had his fingers burnt by the housing collapse but as of yet has not managed to sell his apartment that was bought as an investment.

    1,100 Euros is higher than a lot of people in the UK earn working full time. It equates to about 17,000 Euros gross in the UK and as Spain IS cheaper than the UK in regard to accommodation, travel cost and most foods it’s probably equivalent of earning £20,000 in the UK.

    My point is that this must have been (and continues to be) a huge cost to the Spanish Government. With 20% unemployment ( I understand not all receive this sum) it must take around another 40% of employed Spanish just to pay this social security cost.

    Also receiving this benefit has effectively allowed him to continue to advertise his apartment at an unrealistic price with the hope that it will sell soon, when in effect the floor in the market has been moving down continually.

    So as this benefit is now slowly stopped for all those who have been unemployed for 2 years some of the support that has been propping up advertised prices has effectively gone.

    There must be 100’s of thousands of unemployed Spanish holiday home owners and crunch time has now come whereby the property must be disposed of at any cost.

    The Spanish Government also cannot borrow to fund the social security cost.

    I wonder what is going to happen in Spain during the next 12 months as when this period expires virtually all those 20% unemployed will no longer be eligible for benefit.

  • #99403
    Profile photo of Anonymous
    Anonymous
    Participant

    In most of the EU, the unemployment benefit is around 80% of the final salary. It was similar in UK. Mrs Thatcher changed it. Realising that this could not be sustained due to mining, steel workers and a shift of economy from industrial, manufacturing to service sector.

    I sit on the fence on this one as I can see both arguments. If a person loses his/her job his expenses continues e.g rent, light & heat, food etc. So paying them 80% of the final salary mean that they can live with dignity and no holidays, eating out etc.

    On the other hand when a large number of people are unemployed the benefits paid out are under stress. Having taken this view the cost of employers contribution in Spain is very high and as such the payment of 80% of final salary should be met. For how long is another question.

    A economy which has not been modernised, inflexibility of labour, irrational employment laws, all these have to be modernised, better training and industrial relations is required. If the circle has to be squared.

  • #99404
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Shakeel,

    I don’t have a problem with the benefit and was aware of the system. There is a maximum cap and 1,100 Euros is it. This is considerably less than 80% of his salary.

    In fact I think the Spainsh system is a lot fairer than the UK, it rewards those who have worked hard and contributed to society, unlike our system that will pay everybody to just sit at home and watch daytime TV indefinitely.

    The main point was that it must be costing the Spanish Government a huge sum and is in effect supporting the property market directly. However, this situation is about to come to an end

  • #99405
    Profile photo of Anonymous
    Anonymous
    Participant

    Yes, the system is fairer in most EU Country. My late uncle was made redundant in the early 90’s, at the time he was on £200,000 a fellow of the institute of Chartered Accountant. As a married men he offered £85+/_ per week and was asked to attend courses as to how to prepare a CV.

    The payment of 80% +/_ can be sustained in a dynamic, flexible and versatile economy not when the Country has to support 60 million people with exports of fruits & tourism. Scandinavian economies are a good example of such generous social system.

    I have mix feelings for the Spaniards as I am very fond of them & would not like them to suffer. However there attitude towards work, lack of responsibility, accountability, trying to do the least & getting away with it is what I take issue with.

    They do not seam to understand that they need to create wealth before they can distribute it. There are many historical, political and ideological reasons for it. Which makes them have the “Burro” mentality.

  • #99406
    Profile photo of katy
    katy
    Spectator

    The majority of workers in Andalucia don’t earn more than 1000 euro when working. Many others have been on short term work contracts and are not entitled to full benefit.

  • #99411
    Profile photo of Chris McCarthy
    Chris McCarthy
    Participant

    Back in the day…

    When I, believe it or not, had more than 150 people working for us on a full Spanish labour contract, the staff only considered their contracts as the net figure they received, and so did we and I rarely thought about how that equated to what people earned gross in the UK.

    However, I can tell you that when we had that level of fully contracted employees the social security contribution alone was between €220,000 – €240,000 per month.

    Yes, believe it or not, a cool quarter of a million per month, so all those staff who eventually had to go and claim their Paro, was it, is it the government affording to pay it? Or was it ourselves who paid it and then some.

    People getting the 80% for two years up to a maximum of I think yes €1,200 or so, well we paid that for many of them, not just for two years but an average of six years for those that left at the end.

    So, the government should more than be able to afford it really, they already have received the money several times over to do so.

    And or, now they should look at changing the labour laws so that people can afford to hire people once again, because today they cannot and will not.

    Catch 22, great when times are good, just awful when times are not.

  • #99415
    Profile photo of Anonymous
    Anonymous
    Participant

    @Chris McCarthy wrote:

    Back in the day…

    When I, believe it or not, had more than 150 people working for us on a full Spanish labour contract, the staff only considered their contracts as the net figure they received, and so did we and I rarely thought about how that equated to what people earned gross in the UK.

    However, I can tell you that when we had that level of fully contracted employees the social security contribution alone was between €220,000 – €240,000 per month.

    Yes, believe it or not, a cool quarter of a million per month, so all those staff who eventually had to go and claim their Paro, was it, is it the government affording to pay it? Or was it ourselves who paid it and then some.

    People getting the 80% for two years up to a maximum of I think yes €1,200 or so, well we paid that for many of them, not just for two years but an average of six years for those that left at the end.

    So, the government should more than be able to afford it really, they already have received the money several times over to do so.

    And or, now they should look at changing the labour laws so that people can afford to hire people once again, because today they cannot and will not.

    Catch 22, great when times are good, just awful when times are not.

    if thats true you were paying more in ssc’s than alot of people earn a week GROSS and your staff must have been earning a fortune for you in commision to be able to afford it.do i feel sorry for any of them who are now unemployed and didn’t save for a rainy day
    DO I HECK. I am a ceramic tiler and the building industry in england is very slow, I have had 2 days work this week but i am paying my bills from my savings and thinking saving in the good times was a good idea instead of having the spend spend spend mentality.
    Maybe i should of been in charge of the countries finances instead of the labour government and then we wouldn’t be in the mess we are.

  • #99432
    Profile photo of Chris McCarthy
    Chris McCarthy
    Participant

    @dartboy wrote:

    if thats true you were paying more in ssc’s than alot of people earn a week GROSS and your staff must have been earning a fortune for you in commision to be able to afford it.do
    .

    These payments had nothing to do with commissions, this was simply contract staff.

    If I recall, I think someone who was receiving net €2,000 would cost ourselves gross €3,500 – €3,800 once we had paid the Social Security.

    And of course if at any time we wanted to dismiss a person, then we would have had to pay 45 days salary per year worked, so come the end of of the day, when we really had to reduce personnel significantly to survive, well it would have cost a couple €million to do so. Which was frankly an impossible situation for everyone involved.

    The system is / was nuts, complete and utter bonkers.

    But virtually to a man / woman when the staff left, they all felt that taking 1-2 years out was an OK good thing to do, they would be getting 80% of their salary, don’t know how many would have worked outside of that, but these were people choosing to have a year or two off and not your typical unemployed but all on the statistics for same.

    Now two years past, most of them are all back in work. But again, it was not the government affording it, they had already been well paid to do so and long in advance.

  • #99433
    Profile photo of Anonymous
    Anonymous
    Participant

    Chris: you have summed it. The very reason’s reason for the high unemployment, lack of productivity, motivations, quality as employers save on training cost, and the black economy.

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