Spanish unemployment could take 10 more years to return to the levels seen before the financial crisis, according to a report that paints a picture of an economy hampered by low wages, low skills and lack of investment in research.
Spanish workers earn 20%-40% less than those in other leading European countries, according to the study by Spain‘s second-biggest bank, BBVA. The earnings gap is partly explained by very high unemployment, which BBVA said “derives from a labour market that functions substantially worse than in other countries”.
The bank found Spanish spending on research and development is 70% below the US or EU average, and said the economy suffered from low skills and a lack of technology in the workplace.
“All of these differences derive from an inadequate legal and institutional system of incentives,” the report said. The researchers forecast that even if employment increased at a rate of 2% it would take 10 years to reach 2007 levels.