A few years ago, Spain's fast-expanding economy was creating a third of all new jobs in the European Union.
But in the past year, about 1 out of every 2 layoffs in Europe has been in Spain, where the unemployment rate has soared to more than 17 percent.
Amid the global recession in Spain, losing a job can be a catastrophe — or it can be like hitting the jackpot.
Temporary Workers Hit Hard
Ainhoa Balsera, 30, used to work as a cleaning lady. On a recent day, she visited an unemployment office in the Madrid suburb of Alcobendas.
"It used to take less than 15 days to find a job," she says. "Now, there's nothing. Things are bad."
Her last job was at a public school, which had just been renovated. The work lasted a month and a half.
Now, she is collecting a monthly welfare check of $550.
"I'm surviving, barely, but I have no alternative," says Balsera, who has a 9-year-old daughter.
Her story is typical in Spain, where 4 million people are now out of work. Most of them are female and young, and many are immigrants. For those under 25, the jobless rate is nearly 32 percent. Many people who had jobs in construction or the service industries during the housing boom are now unemployed and get minimum benefits.
But it is an entirely different story for experienced workers leaving white-collar contract positions and union jobs.
Some Enjoy Golden Parachutes
These days, Fred Ankaoua spends lots of time at home with his two young sons, and he is finally working on the novel he had long dreamed of writing.
The 45-year-old Frenchman used to work for a telecom company in Madrid. After six years with the firm, he agreed to a voluntary dismissal. In exchange, he received a generous severance package.
One advantage is that he is home more with the children, he says.
"Usually, when I used to work, I was coming back late, so very often I came and the kids were at bed. So now, at least I can catch them at school and see them before they go to sleep," he says.
White-collar workers are not the only ones getting such golden parachutes. A few weeks ago, autoworkers laid off from a Nissan plant in Barcelona were given up to $150,000 each.
Such payouts are one reason there has been little labor unrest in Spain, even though there are more people out of work now than at any time in the past half-century.
Labor Law Out Of Sync With Labor Market
By law, a company that fires an employee with a contract must pay at least 20 days per year worked. But many offer several times that much, in order to avoid strikes and drawn-out court battles.
Ken Dubin, an American-born labor expert who teaches at a business school in Madrid, says the system is designed to protect the worker who stays at the same job until retirement and who is the only breadwinner of his household.
"This is the assumption underlying Spanish labor law. It obviously has nothing to do with the way the labor market works these days," he says.
In Spain in recent years, employers got around restrictive labor regulations by hiring lots of temporary workers, and that has created a two-tier labor market, Dubin says.
"So there's a certain group of people for whom this crisis basically means winning the lottery. And it's not a small group of people," he says.
But for an even larger group of people, Dubin says, the downturn has cut off virtually all access to benefits, with the excerption of health care and basic social assistance.
Inequity Stain On Socialist Government
The free health care lifts a huge burden from the unemployed. But Spain's socialist government has come under intense criticism for the country's high unemployment rate and the inequity in benefits. The government is under pressure to reduce the high cost of firing workers so that companies will be more inclined to hire them.
But Prime Minister Jose Luis Rodriguez Zapatero was defiant at a recent political rally. He enjoys support from Spain's major unions, whose membership is mostly made up of workers with contracts.
"There will be neither reforms to facilitate layoffs nor reductions in social expenditures, because I won't be blackmailed by anybody," he said.
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