Reply To: Unemployment

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I can’t see all those immigrant brickies retraining as hairdressers or filo pastry chefs so who knows what will happen when they lose their jobs. That’s the danger of depending too much on construction, as Spain does. This unproductive sector has sucked up 18% of the economy’s resources, the opportunity cost being the type of human capital and capital formation it needs to move up the value chain when the construction sector tanks. And believe me, it has to tank. Travel the Spanish coast with your eyes open and see the writing on the wall. It’s one big construction site.

Looking at the long term, massive construction is not necessarily a bad thing if it is thoughtful and attractive, as in the long run the market will clear. Unfortunately a lot of what has been built in Spain in recent years is mindless, ugly, shenzy crap that is now with us forever. Buyers of this rubbish are as much to blame as the developers and town planners.