by Ramon Gonzalez:
“SALE!” The subways of Bilbao, Spain, are dotted with advertisements for a department store called Park Avenue, promising discounts of up to 90 percent. These rebates jump out even amidst the recent recalibrations of economic desperation. The transformation of the store’s name from marker of material wealth to symptom of financial disaster encapsulates the incredible, and now awful, economic interdependence of recent years as fire sales spread from Park Avenue banks to the store Park Avenue.
It’s a common story, but Spain represents its distilled form: a country that grew for years fueled by construction, cheap labor, and massive population movement. Spaniards moved from the countryside to the cities, Northern Europeans visited to forget work, and legions of immigrants came to find some. The foam party has ended, and the bubbles are bursting as a weary Spain staggers into a terrible reckoning. Although historically high, unemployment has now shot up to 18 percent, double the European Union average, and everyone from experts to ex-workers acknowledges that it will punch through 20 percent soon.
“In the United States they say the crisis is U-shaped. Sharp fall, but large recovery,” explained Professor José Ramón Canedo of the University of Deusto with a morbid excitement about economic crises that only professors can muster. “In Spain they say it’s a crisis in L. We fall straight and then…” He mimed the flattening of a heart-rate monitor, putting a flourish on the point with a steady “beep.” The bad news, though, is dispiritingly alive: Investment in real estate fell 12.4 percent in the past year, and youth unemployment stands at 35.7 percent, according to the Instituto Nacional de Estadística. The unemployment rate in construction, Professor Canedo said, “is a full drama.”
Marisol Esteban is one of many who have suffered on this stage. Along with her son and son-in-law, she ran a ten-man construction outfit that subcontracted for government road construction. Now she sits at home out of work, lamenting that “our problem wasn’t finding work, it was getting paid.” Esteban’s firm, as standard practice, was paid on completion. But when the larger firm that contracted the work defaulted, she was forced to the do the same on the loans she had taken out to finish the projects. Concerned about the disappearance of the money that the town owed the contractor, she put the matter in the hands of lawyers. This is not a sign of confidence in their ability but rather comes accompanied by shrugging shoulders, a leftward roll of the head and eyes, and the sigh of the country that brought us que sera, sera.
Esteban blames the banks. Because of debts and defaults, she remarked with bewildered bitterness, “Banks now own half of Spain, but I’m not sure what they will do with all of it.” She painted a grim picture of businesses choked off by dominoes of debt, delinquency, and default. “I know companies that have jobs till 2012, but they have no access to capital for their projects so they have to close down and throw their workers to the streets.”
For many workers, especially the predominantly immigrant laborers in construction, these streets now lead out of Spain. Outside of her family, all of the workers in Esteban’s firm were foreigners who have now journeyed back home to Morocco and South America, encouraged by a government policy that gives them their unemployment benefits in a lump sum if they leave the country for three years.
“My son-in-law got a job this week working with construction equipment,” said Esteban. He used to supervise construction. Transitioning from the post of jefe to a spot behind the jackhammer, it helps to be a jack of all trades and also to have friends, through whom he got the job. Esteban’s son, Iñigo Extaniz, just received a three-month contract to work at an oil refinery, also through friends. During his nine months off work, he took courses in economics and renewable energy, a sector that has grown spectacularly in Spain in recent years. Wind turbines account for 10 percent of Spain’s energy and for wry and self-deprecating jokes about Quixotism, what Miguel de Unamuno called Spain’s one true religion. Extaniz’s employment after his education hints at an uncomfortable truth: Economist Gabriel Calzada calculated that government support for clean energy subsidies has cost the economy 110,000 jobs and that every $1.4 million in subsidies produces only one wind energy job.
As he discusses his own experiences with Spain’s job market, Extaniz ticks off the local damage. One friend works at a car dealership that has let nine people go; another sells construction materials and has noticed a huge slowdown. “IBM has been firing two people a day,” Extaniz said. “There’s just a terrible insecurity… Everybody’s just waiting. People who have money don’t want to spend it, and those who want to can’t.”
The Professional Class
A slight distance can be heard when members of the Spanish professional class talk about the crisis. Tirso, who asked that his last name not be used when commenting on his firm’s business, had just flown back from the Canary Islands where he used to do a lot of work as an architect specializing in residential property. Now the flights are less frequent. When asked how business was going, he grinned knowingly and shook his right hand up and down.
The signs of economic trouble are hard to miss. In some neighborhoods, “For Sale” signs hang in every lobby, stores advertise large discounts, and occasionally stalled projects puncture the skyline like the stale, half-empty beers of the morning’s regrets. The party was wilder along the Mediterranean coast and in the market for vacation properties. Esteban described a recent visit to Tenerife in the Canary Islands: “There were mountains of concrete shells of unfinished buildings. A catastrophe.” While news about the crisis flows constantly across the airwaves and printing presses, its effects on daily life appear hidden. For wealthy workers, the crisis exists more as an abstract curiosity, far from the personal nightmare that it is to many others; for them, the crisis is a point of discussion, not desperation. In July, conversation centered around plans for August vacations and opprobrium of Real Madrid’s record-breaking signing of soccer player Cristiano Ronaldo, not the country’s turbulent economic condition.
But the absence of woe among the professional classes should not be taken as a vote of confidence. One family from the corporate world — the father, a major auto industry executive; the sons, lawyers and investment analysts — expressed a unanimous and deep skepticism of government reassurances over lunch. Few were persuaded when Prime Minster Zapatero recently told El Pais: “The worst has passed. We will start to grow in the first quarter of 2010.” Zapatero contradicted forecasts from the International Monetary Fund and the Organisation for Economic Co-operation and Development, as well as those of his own economic ministry. When asked whether Spain was witnessing the green shoots of recovery, the table snickered. “The only people saying that,” said the lawyer, “are smoking the leaves.”
Down and Out
The twin pillars of construction and tourism that drove 15 years of furious growth have collapsed, yanking the Spanish economy into a tailspin that has dealt particular damage to the millions of immigrants — the most any country has received in recent years except the United States — who flooded and considerably built up Spain’s shores.
In the San Francisco area of Bilbao, historically the home of its poor, immigrant, and drug-addled, the languid streets reveal a community wracked by unemployment. Recently unemployed men lured to Bilbao from all over Spain by reports of expansive social services and the hope of a new start now linger in overlapping purgatories of immigration and unemployment, stuck between a crisis and a far-away place. Old Portuguese ladies shuffle past milling throngs of young Arab men, specialized stores cater to the foods and fashions of home, wherever it may be, and venders advertise telephone cards to every country south of Gibraltar. Suburban moms preach careful warnings to their children to avoid the streets. NGOs and social workers have taken root for the same reasons.
Against the hum of computers, Leire Casas, a worker at Proyecto Konekta, explained the group’s efforts to provide computer access to poor immigrants, both for personal use — communicating with home, reading old newspapers, and looking for work — and for learning new skills. At 2:30 in the afternoon, the center was full of men clicking, listening, and watching. Occasional words to neighbors gave off an air of grown familiarity. “Women,” Casas explained, “have an easier time finding jobs, especially in domestic work.”
It is no easier for immigrants to find housing. Renting is a rare phenomenon in Spain, and immigrants have a particularly tough time because they often have “no history and owners don’t have confidence in them.” Because of this, individuals in the barrio sublet overcrowded apartments. “Sometimes up to twelve men live in the same apartment,” Casis said. Whereas the inter-generational family support and house-ownership of middle-class Spaniards mask the effects of unemployment, the greater crowding in poor, immigrant areas forces them out onto the street.
During the struggles of their first months in Bilbao, even the street becomes a home for many immigrants. Roadouan, 26, described his difficulties on arrival: “I slept in the street; it took so long to get the metro ticket and find a social work site. It’s better now; I know people.” Khadir, a middle-aged Moroccan man, told a story of life on the streets for two months with barely anything to eat; even now, months later, he lives in an old, abandoned house with some friends. His simple phrases and wry grin belied the intensity of the suffering he described.
The crisis has deferred any dreams of a fresh start. “Without a contract for employment you can’t get a residence card, but without a residence card you can’t get a job,” Khadir noted grimly. Now some companies are starting to offer pre-contracts to square this circle, but the practice is not widespread and contracts remain elusive. A few low-skill jobs exist outside of this vicious loop, but they are difficult and occasionally even dangerous to get. Radouan declared that there has been no work in 2009, and by way of explanation and without any note of complaint, said that “many people without papers are looking for jobs.” They wait, fed on meager government welfare and unfulfilled dreams.
“I want to return home,” insisted Yacine, also from Morocco, “but can’t without money. When I left, my family and village were very poor. They think I’m their salvation. Then you see the reality of life without work, and you just can’t go back to face their disappointment.” Yacine spoke in a crisp British accent that flowed on near flawless English little practiced during his six years in Italy. He also speaks French, Arabic, and Spanish. How can such an educated man, now struggling around Spain “without money, without work,” explain his failures to his family? Witnessing the individual excellence that lingers without real hope, growing older, growing poorer, leaves any observer at a loss.
“The government has said: ‘Don’t worry, we will get out of this crisis.’ Fine, a Noble Prize for them. But the question is when? And how?” asked Professor Canedo. Government stimulus has been bandied about, and mutterings about changing Spain’s model of tourism to greater value-added services are mentioned. But because of the depth and simultaneity of Spain’s problems, her best hopes lie simply in the passage of time to erase national mistakes.
As the heart of the economy stops, daily life continues. Ktkorkinenkin Bat, another social work center in the San Francisco neighborhood, offers six-month classes with field trips — my interview there was cut short because students were heading off to the Guggenheim Museum. As Marisol Esteban, struggling businesswoman and mother, raved against the passivity of Spaniards and spoke of her hope for some protests, she dashed on some perfume to go meet a friend. “Year by year without work we wait,” Yacine said. “We pray to the gods that things change.” From all around Spain, the pleas and the prayers go up quietly. They will need the miracles.
Ramon Gonzalez is a sophomore Economics major in Branford College.