The above chart, derived from OECD data, shows the year-on-year changes in labour productivity (measured as GPD per hour worked) for a selection of countries. Readers might note that in 2007 Spain led the United States, France and Germany in this regard and, in 2008, only fell behind the U.S.A.
We thought this to be a touch odd, and drew up the next graph, from OECD, Eurostat and INE data.
It shows the Spanish unemployment rate (divided by 100 to make it scale properly) alongside the measure illustrated above, all from 1997 to 2008. Decreases in the UR are always accompanied by the same in the productivity measure - and vice versa.
This writer thinks that the chart bears some witness to the, now widely reported, expansion of the submerged economy here. The relationship is simple. When times are good, unregistered workers sign up officially, or get signed on by their employers, in droves and reported hours worked increase.* The dip arrives and the brunt is taken by government finances as everyone involved starts gaming the system by falsely reporting reduced hours or outright unemployment. Hours officially decrease and productivity smells like a rose.
Readers should feel free to suggest other explanations, but we continue to see reasons to not take to heart Spanish economic statistics.
*Among the reasons for this would be that small enterprises suddenly become big enough to appear on the social security and Hacienda radar.
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3 Comments:
Perhaps related to housing and credit cycle too? A big incentive to "come clean" for workers was to obtain mortages and buy cars/TVs/whatever on credit.
JSA,
Quite correct. Thanks.
Harlot,
once again sorry about my English ( I am the product of spanish education). Another easier explanation could be that in Spain there are a lot of workers who really don´t work.
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