Understanding Spain’s Economy: Sectors, Resources & Labor
Labor Force
The labor force includes all persons 16 years and older who provide labor for the production of goods and/or services, are available, and make efforts to join the working world. It comprises people who are employed and those who are seeking employment. In Spain, there was a marked increase in the labor force from 1987, due to the active incorporation of women into the workplace. In 2008, the population had a high number of workers, mainly because of the labor of young people born during the spectacular growth of the early 1970s, the arrival of many immigrants, and especially the incorporation of women into the workplace.
Active Population
The active population refers to the population aged 16 and over holding a job contract. Before the current crisis, one of the autonomous communities of Spain had a higher percentage of the active population in the entire state, especially during the tourist season.
Economic Sectors
Primary Sector
The primary sector includes activities aimed at obtaining raw materials. In Spain, in the early 20th century, around 64% of the population was employed in this sector, while in 2009, it was only 4.4% of the active population. This large decrease is the result of rural exodus.
Secondary Sector
The secondary sector comprises activities aimed at the transformation of raw materials. In Spain, at the beginning of the 20th century, it occupied a small percentage of the workforce because of inadequate industrial development. Currently, it occupies a similar percentage, but not because of technology, but rather due to the loss of jobs caused by the current crisis.
Tertiary Sector
The tertiary sector includes activities that provide services. In Spain in 1900, it showed a reduced percentage of the workforce, which has gradually increased over the 20th century. By around 2008, it accounted for about 80% of the population. However, during 2009, this sector lost many jobs.
Unemployment and Employment Rates
Unemployment Rate
The unemployment rate is the percentage of the active population that is unemployed compared to the total workforce. In early November 2009, Spain had the highest unemployment rate in the EU, at 18% of the workforce, and the trend was expected to increase to over 21%, which translates to about 6 million people.
Employment Rate
The employment rate is the percentage of the active population that is employed in respect of the total workforce. In Spain, it has declined significantly since many jobs have been lost.
Underground Economy
The underground economy refers to economic activities taking place clandestinely, escaping the control of tax laws and regulations of the state. Unemployment often fuels the underground economy.
Privatization and Public/Private Sectors
Privatization
Privatization is the conversion of public companies into private ones through the issuance of shares sold on the stock market. In Spain, public companies such as Telefónica were privatized in the 1980s.
Public Sector
The public sector is an area of economic activity that is controlled by the state, either directly or through public enterprises. The increase in public services was most noticeable after the Second World War, when developed countries created a network of public services financed by public administrations and available to the general population. The result is called the welfare state. These services have created many jobs. From the 1980s, Spain saw a further extension of services through the creation of autonomous administrations.
Private Sector
The private sector refers to the whole world of private enterprise, where economic decisions are not controlled by the state.
Renewable and Non-Renewable Resources
Renewable Resources
A renewable resource is linked to the natural environment and regenerates naturally at a rate higher than or equal to that at which it is exploited by society. In Spain, the most active renewable resources are wind power, solar power, hydropower, and geothermal energy.
Non-Renewable Resources
A non-renewable resource is generated in nature so slowly that it exists in finite quantities. Typical non-renewable resources are coal, oil, and natural gas. Spain has a shortage of non-renewable resources, making it dependent on other states from an energy standpoint.
Sustainable Growth
Sustainable growth is the possibility of exploiting the resources of a country or region without degrading or destroying them, or jeopardizing their survival for future generations.