Economic Crisis in Spain – Scenes from Spanish Austerity

October 20, 2012

There’s a lot I could say about the economic crisis in Spain.

I’ve been searching the web for English-language blogs about Spain for years, and have only managed to find a few, which universally portray Spain as an exciting tourist destination, a good place to look at architecture, and a land of abundant and varied cuisine.

Spain is all those things, of course, and you won’t hear me saying otherwise.

But there’s a huge economic crisis in Spain.

Which means it’s also a land of 25% unemployment, of financial problems for families and businesses, and of austerity.

I wanted to share some of what is going on here—I spend every day immersed in this goddamn crisis, and it looks like it’s going to get worse before it gets better.

So if you are looking for something about tapas, architecture, or beautiful beaches, check out some of my other articles. This one is about my personal experience with austerity.

And to think that when I was a teenager back home, I thought history was over! I never imagined I’d be living in such interesting times.

economic crisis in spain

Let’s begin. Here are some scenes from Spanish austerity…

Economic Crisis in Spain: Bosses Who Can’t Afford Payroll

I’ve heard a version of the same story from a depressingly large percentage of people I know: pay day comes and the boss announces that the company doesn’t have money to pay their employees.

Usually they pass the blame off on to whoever it is who was supposed to pay them this month, and hasn’t. Now that companies aren’t able to get credit from a bank to pay their suppliers or service providers, money is just not moving anymore.

Employees of these companies are in a kind of catch-22, because if they quit their jobs they know they’ll never get paid, but if they keep working they know it might end up being for free.

It doesn’t help matters that the owners of these companies are crying broke when a lot of them have 5 houses, sports cars, and expensive drug habits—mostly acquired when the economy was going well, but not appropriate for these austere times.

If the boss goes a few months without paying, the employees will start to leave. Some bosses, knowing they’re going bankrupt anyway, have come up with a creative solution: let the workers take things from the office, to avoid a bank repossession.

True story: the microwave in my house appeared this way, after 4 or 5 months in which my friend was paid little to nothing for his work. It’s not a bad microwave, all told. But not a great substitute for thousands of euros in back wages.

Fewer Trains, Higher Prices

I remember when the monthly pass for the metro and buses cost only 36 euros. Then again, I’ve been here a long time.

Now, the metro pass costs 52€.

The last few weeks and months, the local government has also gone about cutting back the number of trains and even the number of metro entrances that are open. That allows them to pay fewer security guards and fewer employees, but it also means that the same number of people are buying tickets from half as many machines, and the same number of people are squeezing onto fewer trains.

Metro employees are, understandably, unhappy about the budget cuts, and have responded by going on partial strikes, meaning only half the normal trains are run at rush hour. It makes walking an hour to get where I’m going seem like a much better idea.

Retroactive Price Hikes during the economic crisis in Spain

My electric bill has been higher than ever recently. The reason is explained in an attached letter: the government has decided to raise the price of the electricity we’re consuming, and the price of the electricity we’ve already consumed.

So we’re paying more for this month, but also we’re paying extra for the power we used and paid for months ago.

Imagine the butcher coming to knock on your door and say: “Sorry, the price of beef has gone up. I’m going to have to ask you for 3 bucks extra for that steak you ate last week.”

And that’s life during the economic crisis in Spain.

Fun times.


Just Having a Job is Suddenly Glamorous

Back in ‘04 and ‘05, the big social problem in Spain was that young people with college degrees were getting jobs where they only earned 1200 or 1300 euros a month.

That was nothing to brag about back when the price of houses was approaching half a million euros for 2 bedrooms in a working-class neighborhood. And the cost of living is better than London or New York, but hardly great.

Well, welcome to 2012, in which the social problem is that 50% of people under 30 are unemployed, and those that have jobs can only dream of someday making 1200 or 1300 euros a month.

Back in the day, my Spanish coworkers complained about their salaries. Six months into the housing crash, half of the people in their families were unemployed and they were saying, “I’m just happy to have a job!”

Well, I’m happy to have a job, too. But with the way things are going, who knows how long it will last.

(Update: I quit. I’m a digital nomad now.

Economic Crisis in Spain: interesting times, indeed

I remember seeing an Argentinian film several years ago.

It was called Lugares Comunes, and it was about a literature teacher who was forced into retirement with a minimal pension.

He went to a friend who was a lawyer to see if he could sue and get more money, but the lawyer said something along the lines of, “You could sue, but you’d spend years fighting against the state—of course, by that time, the state might not even exist as we now know it.”

At the time, I thought “Jesus, I’m glad I’m not living in Argentina!”

Well, welcome to 2012, where any discussion about the future ends with, “Of course, by that time, Spain might not even exist as we now know it.”

Interesting times, indeed.


Mr Chorizo.

Updated 2017 – finally, after what seems like an eternity but was closer to being only 8 years, we have apparently gotten out of the economic crisis in Spain. Jobs are being created, there’s a lot more construction. It’s still not Germany. But hey, life is good. In other news, tourism is ruining the country (at least according to some) and now Catalonia wants to be independent. So it looks like one way or another, the interesting times are going to continue.

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About the Author Daniel

How did I end up in Spain? Why am I still here almost 20 years later? Excellent questions. With no good answer... Anyway, at some point I became a blogger, bestselling author and contributor to Lonely Planet. So there's that. Drop me a line, I'm happy to hear from you.

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