Spain reports biggest monthly drop in unemployment on record

The Spanish labor market continues to show signs that it is bouncing back from the devastating impact of the coronavirus crisis. The average number of workers who signed up to Spain’s Social Security system, considered a sign of job creation, rose to 19,591,728 in July – the highest figure on record. The last time Social Security affiliations were this high was in July 2019, when there were 19.5 million contributors. In other words, there are around 60,000 more affiliations now than two years ago.

On the unemployment side, figures released on Tuesday show that more than 3.4 million people are jobless in Spain, compared to just over three million in July 2019. But this figure is falling month on month. The number of registered unemployed people dropped 197,841 since June – the highest monthly decline on record. Indeed, this number has been falling nonstop since February, when it broke the four-million mark. In the past three months, the number of unemployed has dropped by nearly half a million. And there are now 365,636 fewer jobless people compared to last year.

It is important to note that these figures do not include workers who are on the government’s ERTE job retention scheme, which was implemented last year to offset the economic effects of the coronavirus pandemic. The scheme has saved thousands of businesses from going under during the pandemic, particularly in the hard-hit tourism industry, but there are concerns unemployment will spike when it comes to an end. An average of 339,000 workers were furloughed in the month of July, according to the data released by the Social Security Ministry on Tuesday.

The employment boost was seen across all industries, but most strongly in the services sector, where the number of unemployed fell by 133,658. With respect to Spain’s 17 regions, the biggest drop in jobless numbers in absolute terms was recorded by Andalusia (-69,159), followed by Catalonia (-37,548) and the Canary Islands (-20,374). In relative terms, the largest falls were recorded by the Balearic Islands (-15.8%), Asturias (-9.9%) and Catalonia (-8.4%).

The data on Spain’s labor market has also shed light on the role of women in the workforce. In June, the number of female workers signed up to the Social Security system rose to a record-high 9,076,939. Although this number fell by around 3,000 in July, the percentage of women in the workforce is still higher than it was last year. In June and July, the share of female affiliations rose 5.2% and 4.8%, respectively, compared to the same months in 2020.

Despite this, women still only make up 46.31% of Social Security contributors, a figure that has only slightly risen in the past decade from 45.11% in 2011. What’s more, although women are the minority in the workforce, they represented 60% of the unemployed in July and 52% of all furloughed workers. Experts say this is due to the over-representation of women in sectors that have been hardest hit by the pandemic, such as hospitality. These sectors also tend to have lower salaries and less recognition.

“If industry, construction and technology remain in the hands of men, it will be difficult for women to increase their participation in the workforce,” explained Javier Blasco, the head of the consultancy firm Adecco Group Institute.

With reporting by Daniel Lara, Sonia Vizoso and Eva Saiz.

English version by Melissa Kitson.