The German labor market began 2010 well above the EU27 benchmark and continued to rise throughout 2010-12, with all variables performing better than EU averages.
By contrast, Spain's labor market index began 2010 well below the EU-average level and has continued to deteriorate over the entire period.
During the last two years the Spanish economy has been characterised by alternating periods of quasi-zero growth and periods of substantial negative growth, such as in Q2 2010 and Q4 2011.
This would appear to be primarily due to its poorly-performing industrial sector leading to a sustained decrease in labour demand. This trend was not driven, however, by a strong surge in real labor costs - as Spanish labor cost and consumer price movements have been generally in line with EU averages.
Speaking at a meeting to launch FedEE's index Robin Chater, secretary-general of the FedEE, said: "Looking at unemployment rates alone can often be highly misleading as there is often a lag between job affordability (real labour costs per unit of output) job creation and the filling of new vacancies. The index shows how these fundamentals come together into a true swing of supply and demand."
He went on to say that "We plan to increase the range of countries covered by the index - but at the outset we thought it would be helpful to focus on two national marketplaces and reveal just how much the Spanish labour market is in an ongoing state of decline and facing a possible total collapse. Around half of all those aged under 25 are unemployed in Spain which could damage the economic health of the nation for a whole generation."
