Spain and its unemployment problems - Essay Example

Causes of high unemployment rates in Spain There have been high reported incidences of unemployment throughout the entire region of the European Union and Spain being among the countries highly affected by the issue. According to data collected by the economics ministry, the rate of unemployment varies among the countries in European Union. For example, it indicated that by then, the rate of unemployment in Luxembourg was 13%, while the rate of unemployment in Spain was 24%. Therefore, there must be different internal factors in Spain, which contributes to the increase of unemployment rates.

These factors include; Spain faces high rates of unemployment due to Real Wage Unemployment. This is a dis-equilibrium unemployment, which happens when the required real wages for a given jobs are above the market clearing level. This type of unemployment in Spain results from trade unions and other wages boards. Secondly, Spain records high rates of unemployment because of demand deficient unemployment, which lowers the demand for both the goods and services produced within the country. Economic recession experienced in Spain contributes to this problem as they results into many companies closing up their businesses hence putting off workers.

Thirdly, Spain has high rates of unemployment rates resulting from frictional unemployment. This type of unemployment occurs when people change jobs. It can also occur when fresh graduates from universities take a lot of time while in search of an appropriate job that has attractive wages hence being among the unemployed. Finally, incidences of unemployment are high in Spain due low quality and poorly designed. Unemployment refers to an economic indicator that measures the persons who are willing and capable of working but they cannot due to inadequate jobs.

According to the report released by the Economy minister in Spain, the country is experiencing high rates of recession, which will result into an increase in the unemployment rates. The rate of unemployment in the country has highly increased to 25%; hence, negatively affecting its financial status. In Spain, the rate of unemployment is elevated amidst women than men. This is because in 2012, the total unemployed men accounts for 23.60% as women accounts for 24.60% (Dobre& Adriana 184). The rate of unemployment is very high among the youths, which shows the difficulties that young people encounter in search of jobs.

Spain has also recorded an inflation rate of 1.9 %. Since 2002 up to 2012, the highest inflation rate was 5.3 % recorded in July 2008 while the lowest was 1.4% recorded in July 2009 (Osuna 43). Therefore, it is important for Spain’s government to introduce control bank monetary policy in order to maintain price stability so that the inflation rates can be below and close to 2% as increase in inflation rate increases the rate of unemployment in a given state (Osuna 43).As a means of solving the issue of unemployment in Spain, the government should ensure that it fosters economic growth because it highly generates more jobs.

This means that the legislative authorities should study their economic process and introduce impetus to the economy including buying debts from agencies for them to hire.