Dispatch from Spain: How does a country deal with 20 percent unemployment?

Recently I traveled to Spain with the intention of investigating, “How does a country deal with 20 percent unemployment?” I had been invited to give a talk at a conference in Barcelona sponsored by the Socialist and Democratic Group in the European Parliament (the equivalent of the Social Democratic Party at the E.U. level), and decided to tack on visits to other parts of Spain. I also traveled to Madrid, to the southern and eastern coasts, and to the mountains around Ronda (made famous to Americans by Ernest Hemingway). I spoke with people in all parts of the country that I visited, including many small business owners, waiters, hotel staff, taxi drivers, museum workers and others, and I also interviewed experts from policy institutes and think tanks.

Paradoxically, the economic strain was apparent, but I also was struck at how remarkably well Spain is coping with this difficult time.

Spain has been much in the news in recent months due to the protestor encampments at the Plaza del Sol in Madrid and other cities, and I visited the ones in Madrid and Barcelona. I interviewed many of the participants, the so-called “Indignados,” many of them young people but not exclusively. Regardless of age, they are deeply disturbed by the trajectory of their country (among young people, official unemployment has been estimated at close to 40 percent, though that figure also is probably lower when you factor in those who are working without a contract). The protesters’ demands are fairly unfocused and light on details (centered mostly around calls for political reform rather than economic reform) but they are not policy experts, which is hardly surprising. Though clearly there are some darn good organizers among them that have not only organized this movement but have in many ways captured the hearts and spirit of the Spanish people, who seem to overwhelmingly support their inchoate outcries in favor of a better life.

But what policies will produce that? That’s what just about everybody in Spain, including the Indignados, are not particularly clear about.

After all, the government in power is led by the Socialist Party, and no one is accusing them of not being in support of “the people.” In the aftermath of a global economic collapse, Spain’s housing market crashed (like in the US) and the economy has not yet recovered. And Spain’s recovery is mixed up in the broader problems of the euro zone and sovereign defaults which right now are shaking Europe at its roots. These are complicated matters, with no quick fixes. Time and patience will be necessary. With no one having solid policy responses that inspire widespread political support, “the people” are left with their righteous yet unfocused demands.

But despite all this unrest, what was equally striking in every place I visited, and just about with everyone to whom I spoke, was a noticeable lack of panic and a general optimism that stubbornly insists on plowing forward and even enjoying life despite current circumstances. You don’t walk around Madrid or Barcelona and think, “This place is falling apart,” quite the contrary. The streets are teeming with people at the cafes, the tapas bars, the taverns, in the parks and plazas; the public space is energized by street musicians, sidewalk artists, and dramatic flamenco performances, and by that indomitable Spanish spirit of duende that has to be felt and seen to be understood. I found Spain to be still fairly throbbing in that way.

As one person told me, “In Greece, they go on strike, in Spain and Portugal, we go to the beach!” Heck, I see far more homeless people and beggars in downtown San Francisco (where I live) than I saw in any parts of Spain. Spaniards still all have health care and other social supports, and their transportation system, including their subways, trams and high-speed rail, is world-class. Everything is still functioning for the most part pretty normally.

Some of the think tank experts relayed how the “family and social pillars,” as they are called, are functioning as they are intended, acting to spread the pain around during these difficult times (as well as to spread the prosperity around during the good times). Spain has had fairly generous unemployment benefits, as well as the aforementioned severance pay, tax deductions and more. Families are motivated to help each other out, especially parents helping out their young adult children, drawing upon savings. And many people claim that the unemployment rate actually is lower than the official 20 percent because so many workers have opted for work in the grey economy and so don’t show up in official figures. All of these factors appear to be mitigating the pain. At least for now.

In short, I came away impressed at how well Spain is handling 20 percent unemployment. I credit that, in part, to a strength of institutions, values and culture (by values, I mean the spirit of solidarity that seems to be prevailing still, and by culture I mean this duende that maintains an optimistic outlook). In Denia, south of Valencia, I was amazed to attend a fiesta on the beach along with 15,000 other people – yes that’s 15,000, not 1500 — celebrating a feast of San Juan.

Walking up and down the beach I could see hundreds of campfires, part of the holiday ritual in which people jumped over the high flames on their way to soaking their heels in the ocean. It was an exciting display of duende, not to be missed, but as my hotel overlooked the beach I couldn’t help but bemoan that the next day the beach would be completely pitted out with empty bottles, lost shoes, bathing suits, condoms, abandoned campfires and who knows what else. Yet, to my pleasant surprise, by the time I awoke the next morning the entire beach had been completely scoured clean. These people had their act together. Crews and sand zambonis in the middle of the night had done it all, like Santa’s elves. In San Francisco, where I live, twenty campfires on the beach on New Year’s Eve leave a scar that lasts for months.

No, something about Spain still undeniably works, despite its present difficulties. I wonder how the US would handle 20 percent unemployment – would we handle it as well as Spain is doing? Do we have the institutions, the values or cohesion to handle that level of economic and societal distress?

Steven Hill

Steven Hill is a U.S. journalist and author of seven books, including Raw Deal: How the Uber Economy and Runaway Capitalism Are Screwing American Workers. He is currently in residence at the Berlin Social Science Center.