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Unemployment: How does Spain cope?

God, fortitude and the black market help people survive soaring jobless rates.

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An 'indignant' protester demonstrates at the Puerta del Sol square in Madrid on November 13, 2011 against spending cuts, high unemployment and political corruption, a week before a general election. (Pedro Armestre/AFP/Getty Images)

MADRID, Spain — Over the last three years the Spanish economy has fallen off a cliff. At 22.8 percent it's unemployment rate is more than double the European average. Its government finances — in surplus at the start of 2008 — are now deeply in the red and the country is paying more than 5 percent interest on its bonds. It is trapped in the contemporary cycle of indebtedness leading to austerity leading to higher unemployment.

Yet Spanish society is holding together for a number of reasons. First, and foremost, family. But then there are others, such as the Catholic Church.

Catholicism is deeply woven into Spanish life, although that doesn't mean that churches are packed with worshippers.

In Madrid's working class barrio, Vallecas, Father Antonio de la Calle, of the Patrocinio del Senor church, laughs out loud when asked if the economic crisis has increased attendance at mass. Then he says, "No."

Father Antonio explains what people really want from the church. "They want the church to be an oasis, a place of calm." A round, bearded and kindly man, the Father keeps the door to his church open at all times. Attendance at mass may not be on the increase but more people are coming to church at other times, the priest says. "People come to sit, to speak to Him, or just cry."

Ask him if faith is the reason the Spanish are so patient with the current situation, and he responds, "People are not patient. They are in shock."

In this neighborhood of 300,000, poverty levels are growing and the priest spends much of his time finding food for the daily soup kitchen he runs. He donates his salary and asks friends for financial contributions. He has made an arrangement with the upscale La Paz open air market to provide food boxes every three weeks, so his parishioners can get fresh fruit and vegetables rather than hand outs of dried or processed food.

Father Antonio also works closely with Caritas, the Catholic social welfare charity. For more than 30 years, Caritas has been training the least employable in Spain and helping them find jobs. Most of those were immigrants. That has changed dramatically in the last three years. Immigrants are leaving Spain and now Caritas is dealing with many more native born Spanish than they ever have.

The year before the economy crashed, Caritas's budget for employment activities was a little over 23 million euros. Today it is over 33 million euros. Eighty-three thousand people used Caritas training and placement services last year. Only 16,791 found work.

"The distance to employment is much greater than it used to be," says Felix Sanchez, who oversees the charity's employment programs. "Four years ago, companies would phone us to ask if we had any workers we could recommend. Now we phone companies — once, twice, three times, four times — with no result."

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It isn't that the people Caritas trains are less able than they used to be. It's because, "a million more people have lost their jobs in the last year or so. These new unemployed have work experience, they have education."

With private employers not hiring, the charity has started its own businesses to employ those it is training. "They are non-profits, of course," says Sanchez. "The businesses are in gardening and cleaning, useful jobs. We pay union rates."

Last year, 534 jobs were created this way. It is simply not enough.

Black Economy

People do not survive just on their family networks and the Church but by doing work off the books. The black economy is notoriously difficult to measure. In the US, the accepted estimate is that a little more than 8 percent of GDP is generated in this zone beyond tax authorities. In Spain the number quoted is 20 percent. But that figure is often disputed.

No two businessmen can agree on the black economy's impact on employment.

Barcelona-based entrepreneur Jordi Roig doesn't think the true unemployment rate is over 20 percent. "If it was true we have a civil war on our hands," he says.

Misael Morate has a small business on the island of Majorca. He thinks the real unemployment rate is actually higher because some people have not been counted. "You have 200,000