Saturday, October 29, 2011

Benefits Run Out for Spain's Jobless

The report's at Wall Street Journal, but click through at Google:
Spain's jobless rate, hovering above 20% since early 2010, reached its highest rate in 15 years in the third quarter, the government reported Friday, at 21.5%—driven up in part by public-sector cuts. The number of households without any income also hit record levels, rising to 559,900, or 3.2% of Spain's families, the government said.

One reason: Three years into the economic crisis, more and more jobless Spaniards are seeing their unemployment benefits expire. The Spanish social safety net for the long-term unemployed runs out more quickly than in many Western European countries, and its unemployment rate is the highest in the European Union.

Most wage-replacement benefits in Spain—which top out at about €1,400 ($2,000) monthly for workers with two children—run out or significantly decline by 24 months, compared with three to five years in some countries, including Belgium and Denmark. Mr. Tuesta's benefits expired late last year.

The government on Friday announced plans to spend an additional €24 billion ($34 billion) on job development from 2012 through 2014. Those expenses could require cuts elsewhere. The euro zone, trying to contain a debt crisis, wants Madrid to slash its budget deficit to 3% of gross domestic product by 2013, from more than 9% last year.

Even as it has frozen pensions and cut public-sector salaries, Spain's government has been loath to trim assistance for the jobless. Still, in August, 71% of Spain's jobless collected unemployment benefits, compared with more than 79% in the summer of 2010, according to the Spanish Labor Ministry.
That's the crisis of the European welfare-state model right there, and right here at home protesters at Occupy Wall Street are campaigning for the exact same fiscal bankruptcy and welfare state nightmare.

It's an upside down world.

RELATED: At Reuters, "Spain's Bankia, Popular 'can meet new capital rules'."