Home > Uncategorized > Jobs and productivity in Spain, 2008-2012

Jobs and productivity in Spain, 2008-2012

In 2008 Spain had 20 million jobs. This number declined to 17 million – a decline which was almost completely due to the bust of the building boom. As construction has a relatively lower productivity average productivity increased because of the decline of building, just like in Ireland. Which means that variables like average productivity and average Unit Labour Cost may not be the best metrics to gauge the competitiveness of a country. And which means that export demand is not the only or even the most important kind of demand to solve the real Spanish problem (which is not debt but the loss of 3 million jobs). Investments in new sectors are needed. Like medical care for old, rich Germans.

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Categories: Uncategorized
  1. November 29, 2012 at 5:21 pm

    Once again, the financial collapse is here attributed to the collapse of the housing boom. I have a contrary view: the collapse was indeed due to falling demand, which led to falling production, but that fall in demand would have happened even without the housing boom. It would have happened sooner, when demand fell due to rising inequality of wealth, with more and more of the wealth in the hands of those who “never dip into capital”. Their income is the interest, profits and capital gains they collect from the economy at large – as long as it remains productive. But that production depends on demand from the “middle class”, the 99%, who by and large do not own the capital increasingly used by business, as “capex” continues to replace “opex”, mostly wages.

    The housing boom resulted when banks began issuing “liar loans” to non-creditable applicants seeking a mortgage. What if every borrower and lender had instead been honest. so no liar loans were issued? The collapse would have occurred back when the banks ran out of borrowers who could pay them back. Why did they run out of creditable borrowers, and begin lending to those who could never pay them back? Because total debt per capita had hit a ceiling, beyond which honest borrowers could pay no more to lenders, so they stopped borrowing. Without the phony demand fueled by the housing boom, the crash would have come sooner.

    The housing boom did not cause the crash, it only delayed what would have happened without it. The ultimate cause of the crash is growing inequality, which continues, even with new housing construction way down. No one addresses the only solution I can see that would work: sustaining demand.via income redistribution sufficient to stop growing inequality of wealth.

    Once robots can build everything we need, how will the great mass of displaced workers, who don’t own the robots and therefore cannot share in their profits, ever get the money to buy what the robots could produce, it there was any demand?

    Only by redistributing the wealth being accumulated by the owners of the robots can demand be sustained. And in fact, such redistribution is in the interest of the robot owners. Without massive redistribution, the robots will stay idle, no profits will ensue, and the displaced workers will become desperate and unruly.once their unemployment benefits run out and they can no longer feed their families. This will be averted only if the 1% wises up and allows redistribution of wealth.

  2. November 29, 2012 at 5:42 pm

    [This includes minor corrections to my foregoing comment.]

    Once again, the financial collapse is here attributed to the collapse of the housing boom. I have a contrary view: the collapse was indeed due to falling demand, which led to falling production, but that fall in demand would have happened even without the housing boom. It would just have happened sooner, when demand fell due to rising inequality of wealth, with more and more of the wealth in the hands of those who “never dip into capital”. Their income is the interest, profits and capital gains they collect from the economy at large – as long as it remains productive. But that production depends on demand from the “middle class”, the 99%, who by and large do not own the capital increasingly used by business, with “capex” continueing to replace “opex”, mostly wages.

    The housing boom resulted when banks began issuing “liar loans” to non-creditable applicants seeking a mortgage. What if every borrower and lender had instead been honest. so no liar loans were issued? The collapse would have occurred back when the banks ran out of borrowers who could pay them back. Why did they run out of creditable borrowers, and begin lending to those who could never pay them back? Because total debt per capita had hit a ceiling, beyond which honest borrowers could pay no more to lenders, so they stopped borrowing. Without the phony demand fueled by the housing boom, the crash would have come sooner.

    The housing boom did not cause the crash, it only delayed what would have happened without it. The ultimate cause of the crash is growing inequality, which continues, even with new housing construction way down. No one addresses the only solution I can see that would work: sustaining demand.via income redistribution sufficient to stop growing inequality of wealth.

    Once robots can build everything we need, how will the great mass of displaced workers, who don’t own the robots and therefore cannot share in their profits, ever get the money to buy what the robots could produce, if there was any demand?

    Only by redistributing the wealth being accumulated by the owners of the robots can demand be sustained. And in fact, such redistribution is in the interest of the robot owners. Without massive redistribution, the robots will stay idle, no profits will flow to their owners, and the displaced workers will become desperate and unruly.once their unemployment benefits run out and they can no longer feed their families. This will be averted only if the 1% wises up and allows redistribution of wealth.

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