Spain Has 23% Unemployment, Industrialized World’s Highest

The pain in Spain in plain. Nearly one out every four of its citizens are unemployed.

Spain’s unemployment rate reached 22.85% at the end of 2011, meaning five million people were jobless. Spain’s the unemployment rate is currently highest in the industrialized world.

Spain is facing a recession in 2012 and jobless numbers will likely increase as national and regional governments slash budgets.

The result was the jobless rate hit the highest level since 1995, rising to 22.85% at the end of the year from 21.52% the previous quarter.

In 2007, during the days of Spain’s real estate boom, unemployment dropped to 7.95%.

But Spain’s real estate bubble burst in 2008. The real estate crisis, combined with the global financial crisis then wiped out millions of jobs, left banks with bad loans, and the nation’s national and regional governments with huge debt.

Spain’s new right-leaning Popular Party government is trying to cut the public deficit to avoid being caught again in a crisis of confidence in Eurozone sovereign debt.

The cost-cutting means even more job losses in hard economic times are likely ahead for Spain. The International Monetary Fund predicts the Spanish economy will contract 1.7% in 2012 and 0.3% in 2013.

Higher jobless numbers make it extremely difficult to curb the deficit because the state must pay more in unemployment benefits while receiving less income from taxes. Some analysts are predicting Spain will have to ease up on cutting government spending to save jobs.