The Most Doomed Part of Spain, in 2 Charts

This is what a lost generation looks like
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Andalusia1.jpg
(Reuters)

Andalusia is Spain's Spain. In other words, it's an unimaginable tragedy that makes the rest of the unimaginable tragedy that is Spain look a bit less bad.

Spain is in a great depression, but its most populous autonomous region, Andalusia, is in a greater one. Unemployment hit 27.2 percent in Spain in the first quarter of 2013, but it was 36.9 percent in Andalusia. It seems like this must be a misprint, but 26.2 percent of the total workforce in Andalusia has not had a job in 6 months; 21.4 percent have not in a year; and 13.9 percent have not in two years. As you can see below in the chart from the National Statistics Institute, almost all of the increase in unemployment in Andalusia, as in the rest of the country, since 2010 has been from the increase in unemployment of two years or more.

(Note: The "already found work" category refers to people who did not have a job at the time of the survey, but did have a job lined up).

AndalusiaUnemployment2.png

The bust has been a horror, but the boom was kind of one too -- albeit a much lesser one. Back in 2005, unemployment in Andalusia was 14.2 percent, and unemployment for two years or more was 2.9 percent. And these were the good times. In other words, Andalusia has historically had high unemployment, most recently among agricultural and construction workers, and been underdeveloped compared to the rest of Spain. It hasn't helped that it, and the rest of the country, have some serious structural problems that keep unemployment up even when the economy is growing, and really pushes unemployment up when it's not.

This sounds rather nebulous, but it just means Spain's labor market isn't working like it should. One reason it isn't working is there's historically been rather low labor mobility in Spain. In other words, people don't move much from where jobs aren't to where jobs are. They stay put. It's not clear why they stay put -- maybe it's due to regional cultural differences or strong family ties? -- but they do, and that keeps unemployment high in high unemployment regions like Andalusia. Now, that doesn't mean people don't move at all for work, but when they do, they don't move far.   That's more bad news for Andalusia, the country's southernmost region, because its neighbors -- Extremadura, Castille-La Mancha and Murcia -- have unemployment of 35.6, 31.5, and 30.4 percent, respectively. You'd have to move far north, to Navarre or Aragon or Catalonia, to find unemployment of "only" 19, 22.4, or 24.5 percent. You know, where the jobs are.

But Spain, and Andalusia's, labor market problems aren't just about too little labor movement. It's about too many labor laws as well. Thanks to overly-generous protections, permanent workers in Spain are, in fact, permanent. Companies can't get rid of them -- which makes companies wary of adding new ones. Instead, companies recycle through temporary workers, who can be added when there's more demand, and let go when there isn't. In other words, there is a two-tiered labor market: older workers who can't be fired, and younger workers who can -- and are. That makes unemployment mostly a young man's burden. Indeed, youth unemployment in Andalusia is an even more unimaginable tragedy. As you can see in the chart below, 82.1 percent of 16 to 19 year-olds and 63.1 percent of 20 to 24 years looking for work can't find it. In total, 66.4 percent of people under 25 are unemployed.

This is what a lost generation looks like.

(Note: 2008 is as far back as the data goes for unemployment by age bracket).

AndalusiaUnemploymentAge.png

Now, this isn't quite as bad as it looks, but it's still a catastrophe. Youth unemployment looks at how many young people who want a job can't find one. It doesn't look at young people who are in school. In other words, it measures the percentage of young people who aren't in school who can't find work. So-called NEET rates, which show what percentage of youths aren't in school or work or job training, offer a better measure of how things are -- but that data isn't offered regionally or very often. The latest numbers, for Spain as a whole, came out in 2011, and offer a similarly catastrophic picture: 25.7 percent of 20 to 24 year-olds and 23.8 percent of 25 to 29 year-olds weren't working or in school or in training.

How are people in Andalusia surviving? Well, unemployment benefits last two years, people tend to live at home a long while, and it's a good bet there's a good amount of off-the-books work going on. But none of that makes putting people back to work in Andalusia -- or any other part of Spain or southern Europe -- any less urgent.

Lost decades have a way of turning into lost generations.
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Matthew O'Brien

Matthew O'Brien is a former senior associate editor at The Atlantic.

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