Spain’s job market catching France’s as competitiveness grows

Is finding work in Spain about to become a little easier?

Amidst the negative headlines that have dominated the search terms of ‘Spain’ and ‘news’ in recent months comes the positive announcement that the job market in Spain is nipping at the heels of its northern neighbour, France.

After three years of rising unemployment, economists at the International Monetary Fund (IMF) have praised the Spanish government’s labour market reforms. In contrast, France’s own high labour costs have seen the country lose ground in the labour market, and there are very real worries that Spain’s renewed vigour and reassessment of its own market will see larger corporations head south.

“A lot of adjustment in Spain is the result of the crisis and the drastic measures to reduce labour costs and make the labour market more flexible,” said Edward Gardner, the IMF’s France mission chief.

“In those terms, France has lost relative to Spain in terms of competitiveness.”

So what does this mean for Spain and, more importantly, work prospects for people who live in Spain?

Economists use labour costs as a measure of how competitive a country’s job market is. Currently, it is estimated that the average French worker costs their employer €34.2 per hour. In Spain, that figure is €20.6 per hour. In layman’s terms, that means lower pay for the average Spanish worker.

But, and it’s a big but, it does mean that employers are more likely to look favourably on Spain in the near future – which can only be good for the job market.

The falling labour costs in Spain have already piqued the interest of French car giant Renault, who recently announced that 7,500 jobs in France would be cut and not replaced. In France, at least. Instead, 1,300 new jobs will be created in Spain.

“I think Spain is going very quickly in the right direction of re-establishing an industrial competitiveness,” said Renault’s Chief Executive, Carlos Ghosn in an interview with Reuters.

Ford has done likewise, creating Spanish jobs after making cuts in expensive Belgium. In fact, in the past two years, Spain’s labour market has grown its share of the eurozone trade market to six per cent, which is extremely encouraging news for the country’s beleaguered unemployed.