Spain’s unemployment rate rose to 22.9 percent, the highest in 15 years, increasing pressure on Spanish Prime Minister Mariano Rajoy to change labor rules and deliver on his election pledge to create jobs in a shrinking economy.
The unemployment rate rose in the fourth quarter from 21.5 percent in the previous three months, the National Statistics Institute (INE) in Madrid said yesterday. That is more than twice the eurozone average and exceeds the median estimate of 22.2 percent in a Bloomberg survey of seven analysts.
Spain is home to a third of the eurozone’s unemployed, according to the EU’s statistics office, which estimates that half of young Spaniards are out of work. The People’s Party government, which won last year’s election after a campaign focused on jobs, has promised to overhaul labor and wage rules in the next two weeks to prompt companies to hire.
Photo: AFP
“This shows that the government has to carry out a labor reform that focuses on incentivizing hiring, rather than just on cutting firing costs,” Estefania Ponte, chief economist at Cortal Consors, said by telephone in Madrid.
“The unemployment rate could end the year at 24 percent,” Ponte added.
The euro pared losses after the data were released, trading at US$1.3102 at 9:32am in Madrid, down less than 0.1 percent.
The number of households with all members out of work rose to 1.58 million and the unemployment rate among immigrants was 34.8 percent, INE said.
Some people registered as unemployed might be working informally. The government has said it will crack down on benefits fraud and limit cash transactions, while Spain’s underground economy might be worth the equivalent of about 19 percent of GDP, compared with 25 percent in Greece and 22 percent in Italy, according to Friedrich Schneider, an economics professor at the University of Linz in Austria.
Spain’s economy contracted 0.3 percent in the fourth quarter, the Bank of Spain estimated on Monday, and might shrink 1.5 percent this year, pushing the unemployment rate to 23.4 percent. That forecast is based on the premise that the government will meet its target of trimming the budget deficit to 4.4 percent of GDP from about 8 percent last year.
Spain plans to change the wage-bargaining laws that allowed labor costs to rise as much as 5.8 percent in annual terms during 2009, the year the economy contracted the most in six decades.
The government also wants to encourage employers to use open-ended contracts rather than temporary agreements, the People’s Party said during the election campaign.
Unions and employers reached an agreement this week to sever the connection between salaries and inflation, limiting wage hikes this year and next to 0.5 percent and 0.6 percent respectively, and linking wage increases in 2014 to economic growth.
Rajoy yesterday said the agreement was “good for Spain,” and pledged additional measures in the next couple of weeks, after the IMF, European Central Bank and EU all called for changes to labor rules.
More than two-thirds of the jobs lost in the eurozone since 2008 were in Spain, Eurostat data show, after the decade-long building boom that drew almost 4 million immigrants to the country collapsed.
The bill will aim to help young people into the job market as the unemployment rate among Spaniards under 25 is 49.6 percent, according to Eurostat, more than twice the eurozone average.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”