April jobless claims surge in Spain due to coronavirus effects

March and April are normally two of the best months for the Spanish labor market, but the coronavirus crisis has turned them into a nightmare.

During this two-month period, the number of people filing for jobless claims has surged by nearly 600,000 (slightly over 300,000 in March and 282,291 in April), for a total of 3.89 million individuals out of a job.

Meanwhile, Social Security system affiliations – considered a measure of job creation – fell by nearly a million people (close to 900,000 in March and 49,071 in April), according to new figures released on Tuesday by the Labor and Social Security ministries. There are now 18.4 million people in Spain paying in to the Social Security system.

In April, the state made 5.2 million unemployment payments

The joint ministry statement notes that the impact of the coronavirus lockdown began to be felt on March 13 and became especially intense during the Easter holiday, which is normally a peak season for tourism.

Broken down by activity, the biggest drops in April Social Security affiliation were seen in retail trade and education, while there was growth in agriculture, said the ministry statement.

Unemployment benefits are another good indicator of the severe deterioration of the Spanish labor market. In April, the state made 5.2 million unemployment payments, a rise of three million from the previous month and a historical record. Spain paid out a total of €4.5 billion in benefits.

These numbers include state aid for workers affected by a temporary layoff scheme known in Spanish as an ERTE, meant to relieve the economic effects of the coronavirus crisis, said the Labor Ministry. These workers are not included in the unemployment figures, however, as they have not been technically fired but rather temporarily sent home, or had their working hours reduced.

New hirings also reflect the slowdown of the labor market. Even though 673,149 new contracts were signed in spite of the strict confinement measures, there were 1.1 million more contracts signed during the same period last year.

The biggest drops in April social security affiliation were seen in retail trade and education, while there was growth in agriculture

Spain’s unemployment rate now stands at 14.4%, more than twice the EU-27 average of around 6.5%, and could rise significantly by the end of the year as the effects of the coronavirus lockdown continue to be felt.

The country’s gross domestic product (GDP) fell 5.2% in the first quarter of 2020 as a result of strict confinement measures, according to an advance report released by the National Statistics Institute (INE) last week. This is the largest quarterly drop in nearly a century.

On Monday, small businesses reopened under certain conditions as part of a deescalation plan aimed at gradually lifting the lockdown.

English version by Susana Urra.