Spain’s improving employment figures set fresh records during October
The number of unemployed workers dropped for the first time in 46 years last month, while the amount of people signed up to the Social Security system – considered a measure of job creation – also hit a new high
Ongoing improvements in Spain’s job market are prompting optimism to rise. For another month – the eighth in a row – employment’s vital signs are showing a recovery that is progressing at a steady beat. So much so, that new milestones keep arriving. In October, for example, there were 159,478 more people signed up to the Social Security system compared to the month before, without factoring in seasonal factors. This measure of job creation reached a total of 19,690,590 people signed up last month, which is a new record for the historical series.
Registered unemployment, meanwhile, also bucked previous trends. The number of jobless fell by 734 people, a drop of 0.02%. While this is a lower figure than those seen in previous months, this is the first time that it has fallen in the 10th month of the year in 46 years – since 1975. October was also the eighth month in a row that the number of jobless fell, reaching 3,257,068.
Forecasts made by the Inclusion, Social Security and Migrations Ministry with data up to October 15 estimated that there would be 91,000 new jobs in the month, a number that was eventually exceeded by a considerable margin. Compared to data from October 2020, the number of people signed up to Social Security grew by 700,226 people. The figure for last month is also 440,361 above that of February 2020, which was the last full month before the effects of the coronavirus began to be felt.
“We have recovered the pre-pandemic levels of employment,” stated deputy prime minister and economy minister Nadia Calviño today, speaking on the Cadena SER radio network. “We can say that such a rapid response in terms of employment in this crisis has been very striking and very surprising,” added Israel Arroyo, the secretary of state for Social Security.
Since February 2021, when the trends in the labor market began to improve, the number of jobseekers has fallen by 751,721. It has done so partly due to this unusual month of October – in the same month in 2020, unemployment rose by 49,558 people compared to the month of September, and in 2019 the increase was even greater: 97,948.
According to Randstad Research, the unusual figures seen last month are “at least partly” due to the “less-negative behavior of employment in hospitality and retail,” given that there has “not been so much seasonal employment created previously that is then lost in October.”
The improvement in employment in Spain, however, is out of step with the recovery of activity, which is moving at a slower rate. What’s more, gross domestic product (GDP) is still eight points below pre-pandemic levels, and well below the Spanish government’s forecasts. Compared to the historical trend, the post-Covid era is being characterized by a reactivation of the labor market that has accelerated faster than economic activity, putting Spain well behind its European partners in terms of GDP.
While the figures for October are positive in general, they also contain bad news for young people, a group that has been particularly hard hit by the coronavirus pandemic. Unemployment for the under-25s grew last month by 5,867 people (an increase of 2.34%). What’s more, according to the data supplied today by the Labor and Social Security ministries, of the 1,892,584 contracts signed in October, 1,682,012 (88.8%) were temporary.
“Our hiring system is overexposed to seasonality,” said Joaquín Pérez Rey, the secretary of state for employment. “The labor reform is decisive,” he said, in reference to the plans of the Socialist Party-Unidas Podemos coalition government to overhaul Spain’s job market. “Its main objective is to strengthen stability in employment. That’s the commitment we have with the labor reform.”
The health of the labor market does not appear to have been affected by the end of the summer season. The strong data from the summer months have remained into the fall, helped in a large part by the now-stable situation in Spain of the pandemic, which has seen many restrictions lifted.
The ever-fewer number of workers on the government’s so-called ERTE furlough scheme is also a factor to take into account. In October, the number of furloughed employees was 190,718 – 48,512 fewer than the last day of September. This shows that in many cases these are workers who are seeking new qualifications in order to return to their jobs. “We are not seeing [workers on ERTEs] moving to the ranks of the unemployed,” Arroyo explained. “In general they are returning to employment.”