Spain’s Economy – Back on its feet | The Economist

This is an excellent, must-read article from the Economist. Check it out!

via Back on its feet | The Economist.

As a result of structural reforms to Spain’s labour market, Spain is now growing strongly ahead of the Eurozone’s norm. Had the reformed labor market been in place earlier, some authorities claim that Spain’s unemployment levels would not have been so severe.

However, Spain’s pain fell mainly upon the young with temporary employment contracts, whilst older workers with traditional jobs have been more protected. Spain’s economic pain was triggered by a property crash, as result of dodgy banks and widespread corruption, countenanced by a socialist government that turned a blind eye and squandered a fortune on pet political causes.

Spain has taken her austerity medicine undiluted, which was prescribed by her creditors, especially Germany. For another insight into Germany’s own labor market reforms open this link.

In comparison to Spain, many other South European countries, most notably Italy and France, have not yet reformed their labor markets.

Personally, I believe that the protected status of some of Europe’s workers is not sustainable. If economic levelers don’t work, watch out for the political reaction, with polarization towards both the hard-left and the hard-right. In this context, I believe that the labor market reforms implicit in the German model are probably the least painful.


Opinion – Youth Unemployment Is a Problem for Social Mobility – Brookings Institution – John Gelmini

The political classes will do nothing about social mobility, as Dr Alf hopes, because they know that within just 18 years from now, 50 percent of American jobs and about 75 percent of European jobs will have disappeared.

Ray Kurzeweil, Google’s Chief Futurist and CTO, has said that by 2019 artificial intelligence will have caught up with innate human intelligence and that after that humans will have “augmented reality” by which he means implanted expert systems on chips inserted into their brains.

This year’s Bilderberg meeting had AI as an agenda item yet nothing has emerged about how these great and good are going to create jobs and not be Luddites.

The fact is I Robot and the Matrix are on the way and there will be less social mobility not more.


Because all the traditional blue collar jobs and call centre type jobs can be automated and jobs like teaching will be eliminated by virtue of issuing an adult with a chip which will enable them to do a job or perform a task without being taught anything.

Jobs requiring interpersonal skills like senior management and high value sales will be the exception but for the great unwashed who lack these skills it will be a case of “know your place” .

John Gelmini