Spain Sustainability Issues

The critical environmental and sustainability issues of Spain:

  1. Unemployment

Close to 3 million jobs were created in Spain in the last 5 years, but that still left 3.2 million without work in the first quarter of 2019. The unemployment rate dropped from a staggering 26.1% in 2013 to 14.7% in the first quarter of 2019, but is still double the EU average and the second highest after Greece. 

Unemployment for those aged between 15 and 24 is particularly acute at 38.7%

Almost 25% of the people who do have jobs are on temporary contracts.

Studies have pointed out that one of the main determinants of both high worker turnover and volatility of youth unemployment is the high incidence of temporary employment in Spain. As the IMF has noted, widespread short-term contracts and temporary employment is a problem in the labor market as it lowers investment in the training of employees under short-term contracts and weakens their productivity. 

Spain’s economic model, heavily based on labour-intensive construction and tourism and not very productive, is a part of the unemployment problem as it does not provide jobs on a sustained basis. Spain has a very high number of small companies: fewer than 1% have more than 50 workers. Firms need to be bigger so they have economies of scale, which would enable them to export more successfully, among other things. Companies also complained they could not find qualified workers to fill posts.

Tourism, which generates 12% of GDP, is a particularly seasonal industry. The Canary Islands, for example, received 15.6 million tourists in 2018 (seven times the islands’ population) and its unemployment rate was 21% in the first quarter of 2019.

The country is also at a greater risk from automation, which would compound the unemployment problem. 

 

  1. Government Debt

Spain’s national debt remains at a frighteningly high level. In the second quarter of 2019, government debt increased by about $11.5 billion to $1.32 trillion in total. That’s about 98.9% of the country’s gross domestic product (GDP). The country owes about $64 billion in interest payments alone each year. 

Growth (projected to be 2.5% of GDP in 2018 and 2.2% in 2019) has been driven mostly by “strong private consumption and investment demand,” while the country has failed to introduce structural reforms to offset any future downturn.

To make matters worse, following months of political stalemate, the country remains under a caretaker administration and could be facing a new repeat election if no governing majority emerges soon. The European Commission urged Spain to “form a stable government” that is able to come up with a budget plan that complies with EU rules to deal with the high debt.

 

  1. Education System

Too much emphasis has been placed on physical infrastructure and not enough on human capital. Spain spends 3.1% of its gross domestic product (GDP) on primary and secondary education, compared to 3.5% for the OECD average.

Almost one in every five people in Spain last year had completed at most a lower secondary education and were not in further education and training, the largest rate in the EU, but down from close to one in three in 2006 when students dropped out of school in droves for a job that was easy to find, particularly in construction.

Skill demands are more polarised in Spain than in many other OECD countries, with a big share of jobs requiring either very low levels of education or very high levels. The share of all jobs requiring only a primary education is higher in Spain at 25%, than in any other OECD country; however, the supply of low-educated workers exceeds demand. At the other end of the labour force, rising educational attainment has created a large supply of highly-qualified adults, but many of them are working in jobs for which they are overqualified.

Among the problems of Spain’s education system are endless reforms, which have changed little. Learning is based excessively on memorization as opposed to critical thinking, students having to repeat a year if they fail a certain number of subjects (which then demotivates them and leads them to drop out of school at 16). The university entrance requirement to take the teaching courses is too low, which means that not always the best quality people become teachers.

The average number of students per class is among the lowest at 13 (compared with 21 in the UK and 22 in France).

 

  1. Income Disparity

It takes a low-income Spanish family four generations, or 120 years, to achieve the country’s average income, according to a report by the Organization for Economic Cooperation and Development. Better job prospects belong to those born into better-educated and more affluent families. This lack of upward mobility actually worsened after the 2008 economic crisis. Blue-collar workers saw their incomes shrink as their hours were cut back. If we take the disposable income ratio between the richest and poorest 20% of the population, Spain is in the fourth most unequal country after Romania, Bulgaria and Greece.

Younger workers have been perhaps the worst hit of any demographic by Spain’s economic problems. The average salaries of young professionals were lower in 2019 than it had been for their counterparts a decade earlier. Young workers with lower skills had it worse: They earned about the same as their peers in the late 1990s. According to the Bank of Spain, the average Spaniard has a net worth that is 13% lower than it would have been if the 2008 crisis had not occurred and the growth that began in the mid-1990s had continued.

 

  1. Environmental Issues

According to the European Commission, Spain racked up more infringements of European Union (EU) environmental law between 2015 and 2018 than any other member state — and nearly three times as many as the average for members of the bloc.

Brussels asked the EU’s Court of Justice to take action against Spain over its “systemic violations” of rules limiting nitrogen dioxide emissions, a poisonous gas in car exhaust.

Spain is also a laggard when it comes to recycling. The country is “far from achieving” the EU goal of recycling 50 percent of urban waste in 2020, the European Commission says. The situation is linked to the Franco dictatorship, which bet on development at all costs, which continues today. As a result mass tourism and construction are the economic motors of the country along with intensive agriculture, and for these sectors environmental laws are a problem.

Spain’s light pollution problem has become so bad over the past 10 to 15 years that light from the country’s biggest cities can be seen from hundreds of kilometers away. The pollution is so bad that it is not only affecting the view of the stars, it is also having a major impact on the environment – excessive light directly affects people’s health, and the flora and fauna, particularly pollinating insects and bird species whose habits have been disturbed by the artificial nighttime light. 

Spain also has a low Clean Waters score of 49, while the global average is 71.