Spanish Jobless Rate Has First Drop in Two Years

Level Still Sky-High, But Some Say Problem Isn’t as Bad as It Seems.

The sky-high jobless rate in Spain fell for the first time in two years, and by almost a full percentage point, yet remains above 26%—more than twice the European average.

Analysts were cautious about whether the quarterly figures reported Thursday represented a real upturn for the recession-hit country. At the same time, many economists and anticorruption specialists suggest that the problem may not be quite as bad as it seems.

A high amount of fraud and a thriving underground economy—along with the strength of Spain’s extended families—helps to explain the social peace that has reigned here despite official statistics depicting an economy that is coming apart at the seams.

“You’d have civil war if unemployment were really 27%,” says Eduardo Fabian, a criminal law professor who is co-chair of the program on corruption studies at the University of Salamanca.

One factor inflating the rate is a government employment agency that does little to push claimants off the dole, prompting people to register as jobless to collect benefits even when they are earning money off the books.

Nationally, the jobless rate fell to 26.3% in the second quarter from 27.2%—the highest rate since records began in 1976, the national statistics bureau INE said. Some 5.98 million people were unemployed in the second quarter.

However, the decline came in large measure because the labor force is shrinking, as more people emigrate or stop looking for work. Almost all the jobs created were focused on coastal areas where summer vacation jobs are concentrated. Sectors like manufacturing and construction continued to lose jobs.

Spain, with a population of 47 million, had a 8% unemployment rate before the global financial crisis burst its housing bubble in 2008.

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