How Government Masks the Plight of Spain’s Lost Generation

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By Don Quijones, Spain & Mexico, editor at WOLF STREET. His blog: Raging Bull-Shit.

“¡Que se jodan!” With these words (which roughly translate as “F**k them”), the Spanish Member of Parliament Andrea Fabra greeted her party leader Mariano Rajoy’s parliamentary announcement, in July 2012, of new cuts in unemployment benefits.

Unbeknownst to Fabra, all three of her words were caught on camera. In predictable fashion, the video went viral, sparking a wave of indignation as well as an online petition for her resignation. But Fabra, the proud daughter of a jailed former big shot of the governing People’s Party, refused to yield. She offered no public apology, instead dispatching a handwritten letter to the head of the chamber in which she lamented her “inappropriate” choice of words.

Now, two years on, Fabra’s inappropriate choice of words have taken on a chillingly prophetic edge. Granted, there can be no telling whether the target of her wrath was really the unemployed; or whether it was, as she claims, the main opposition party, the PSOE. Either way, she got what she wanted: the PSOE is, to her use her term, f**ked, as voters flee its sinking ship; and so, too, are Spain’s unemployed – all 4.4 million of them, 40% of whom now have no “official” source of income.

Bullshit Jobs and Eternal Internships

Also f**ked are growing ranks of Spanish workers, in particular the youngest. Ultimately, it is they who have borne the brunt of the economic fallout from Spain’s real estate crash and the Troika-imposed internal devaluation that followed in its wake. In newly reformed Spain, it is they who must eke out a precarious existence on the margins and the meager scraps provided by bullshit temporary jobs and eternal internships.

And it is they who will have to pay off the government’s debt (ha!) as well as support their parents and grandparents through their retirements (ha!). Exactly how they are supposed to do this is anyone’s guess, especially given their current financial malaise. If lucky, they might one day earn the minimum wage; many will earn less. As for job security, there is none: nine out of ten new job contracts are temporary and in most professional sectors the proportion of temporary contracts is already double the EU average.

What’s more, over 40% of young Spanish workers are over qualified for the jobs they hold, while eight out of ten millenials (that is, those aged between 16 and 30) continue to live with their parents. As for the lucky, brave few who strike out on their own, most of them must cough up more than half of their income on rent, even for shared accommodation.

This is just a little taste of the grim reality facing Spain’s lost and betrayed generation. But it’s not the only reality vying for attention; there is also the government’s version of events.

Lies, Damned Lies and Government Statistics

In the government’s alternate reality, things could not be rosier. “We are on solid ground,” Rajoy recently said. “The recovery is here for good.”

What he failed to mention was the main reason for this supposed improvement: namely that more and more Spaniards are falling into bad old habits. Egged on by the government and media, they are once again buying lots of foreign-manufactured goods they probably don’t need with money they don’t have. That’s right: thanks to a relentless feel-good campaign, internal consumer demand is once again soaring in Spain, just as the country’s exports tumble. In four short words: not a good sign.

But don’t worry about that, the government tells the public reassuringly. It’ll sort itself out. [I’m liberally paraphrasing here.] Instead, dear voters, come and feast your eyes on the latest unemployment data and graphs (that some friends, ahem, just produced for us). Notice how they go up and down in all the right places.

All of which is true. In fact, as economics graphs go, they look pretty good. However, as former senior business executive (of ENAGAS and CAMPSA) Roberto Senteno notes in El Confidencial, something doesn’t quite add up. For starters, according to the statistical methodology employed, if a solid 40-hour-a-week job is destroyed and two 10-hour-a-week jobs are created, as is happening more and more, Spain is all of a sudden one job better off, and its economic situation has improved:

A total of 402,400 jobs have been created (in the last year) using this crude trick alone. The figure actually drops to 61,000 if you seasonally adjust the data and untangle all the lies and flawed assumptions about the active population. But that’s not all: the total number of hours worked has dropped by 3.86 million in the last year.

Making a Mockery Out of Tragedy

If nothing else, the latest release from Spain’s Ministry of Information serves as a reminder of the grave risks of taking “raw” government data at face value. With the possible exception of the big banks, no one has more skin in this rigged game than our respective governments. Indeed, since the Great Recession began, the one area in which government has truly excelled (with the obvious help of certain media outlets and central banks) is in the “presentation” of “raw” economic data.

Through its crude use of statistics, the Spanish government has made a mockery out of tragedy. Its reality of figures, graphs and equations could not diverge more from the on-the-ground reality in Spain, where conditions are set to get a whole lot worse as the IMF and big business lobbies pressure struggling peripheral EU Member States such as Spain to further reduce the minimum salary (currently languishing at €635 a month) as well as enhance “labor mobility” (i.e. make it even easier for companies to dismiss workers).

The result will be increased job insecurity and an even greater preponderance of non-living wages. Meanwhile, the exodus of Spain’s best and brightest will continue unabated. Not that the government will care – indeed, if more and more young people leave the country, the base population on which its unemployment stats are calculated will decrease. And with a little fiddling here and touching up there, its pretty graphs should look even prettier. And that, ultimately, is all that matters in this new age of statistical madness. By Don Quijones. An exclusive for Wolf Street.

A new law in Spain hounds the new media, from blogs to Google, to protect the loyal mainstream press from insolvency and irrelevance. Other governments are ogling similar laws. Read….. ‘To Protect the Press,’ Spain Tries to Muffle the Internet

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  4 comments for “How Government Masks the Plight of Spain’s Lost Generation

  1. Archy Don
    Aug 9, 2014 at 7:41 am

    Coming to America – and already here.

  2. mike
    Aug 9, 2014 at 2:51 pm

    That the IMF asks Spain to make it easier to fire workers is bad? Take a wild guess why 9 in 10 employment contracts are temporary.

    Spanish companies have no choice but to die slowly because they cannot afford to fire their unnecessary workers. Real reforms cannot come soon enough.

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