Spain PM plans emergency employment scheme

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The government announces employment plan after number of jobless rose above 2.5 million in August.

3 September 2008

MADRID -- Prime Minister José Luis Rodríguez Zapatero announced on Tuesday that the government plans to unveil an employment plan next week after data showed the number of unemployed people rose in August to its highest level since 1998.

The surge in the number of unemployed to more than 2.5 million in August is "objectively bad" news, and is one more symptom of the "evident slowdown and stagnation of the economy," Zapatero acknowledged.

Many of those laid off have come from Spain's construction industry, and the government's employment plan is expected to focus on that sector, with government officials hoping to create 100,000 jobs in areas deemed to be in "the collective interest."

Zapatero suggested areas could include projects to rehabilitate town centres, forestry management and social services.

Unemployment rises for fifth consecutive month
The number of people out of work rose for the fifth consecutive month in August to over 2.5 million due to the slump in the housing market and its knock-on effect of companies servicing the construction industry.

According to figures released Tuesday by the Labour Ministry, official jobless claims in August rose by 4.2 percent, or 103,085, from July and were up by just over half a million, or 24.7 percent, from the same month a year earlier.

The number of unemployed in construction was up 9.9 percent, or 38,531 in the month, and up 71 percent from August 2007.

The number of immigrant construction workers out of a job more than doubled compared with a year earlier.

Prime Minister José Luis Rodríguez Zapatero said he would appear in Congress on 10 September to announce measures aimed at providing construction workers who have lost their jobs with alternative employment.

Home sales were down almost 30 percent in the first half of this year. Property developers believe they may have to drop home prices by around 30 percent over the next two to three years to absorb a stock of some 800,000 unsold housing units.

The crisis in the sector looks set to continue for some time. According to figures released Tuesday by the Organization for Economic Cooperation and Development, the number of residential building permits issued in the period March-July declined by almost 60 percent, the biggest fall among OECD member countries.

The total number of unemployed in August was the biggest since February 1998, although the Labour Ministry noted in a statement that the number of people in work has risen sharply.

The secretary general for employment, Maravillas Rojo, said there are almost 20 million people in work in Spain now, with an unemployment rate of 10.5 percent. This compares with 1993, when only 12 million people were employed and the jobless rate was 22 percent.

Rojo said that the latest figures show the labour market has deteriorated, but added that the current situation "is very different from previous crises and requires different responses."

[El Pais / Ángeles Espinosa / Adrián Soto / Expatica]

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