Labor market sets positive records in September, but employment still far from pre-pandemic levels

A total of 84,013 workers signed up with the Social Security system last month, while registered unemployment fell by 26,329 people. Around 700,000 employees remain on the government’s furlough scheme

An employment office in Madrid.
An employment office in Madrid.EFE

Despite the devastating effect that the coronavirus pandemic has had on the Spanish economy, September was a record month for the labor market. Registered unemployment fell by 26,329 people, which is the highest figure since at least 1996, when the current statistical series began.

Employment also grew, with 84,013 new registrations with the Social Security system, also the highest figure for the month of September. This was partly due to new hirings of teachers – more staff are being drafted in across the country so that schools can cope with coronavirus measures – as well as of agricultural workers. The total number of workers signed up with Social Security reached 18,876,389 last month.

That said, the strong figures were not enough to recover even half of the jobs lost due to the coronavirus pandemic, and it should also be noted that 700,000 people in Spain are still on the government’s ERTE furlough scheme. These workers are included in the total number of Social Security affiliates.

In recent years, September has been a relatively good month for the Spanish labor market. August usually sees work contracts terminated as the tourist season starts to wind down, with the consequent falls in affiliation. The next month, meanwhile, usually sees a rebound effect that drives the figure back up, albeit without sufficient force to bring down unemployment. In this case, in the midst of a pandemic that has affected everything, this latter effect is noticeable in the data.

September was the fifth consecutive month that saw Social Security affiliation rise, thanks to education, which accounted for 55,428 new contributors, followed by administrative activities, with 40,005, agriculture, with 35,525, and industry, with 13,359.

The healthcare sector lost 2,000 affiliates in September, but it has gained the most workers in annual terms due to the extra staff needed since March to deal with the pandemic. A total of 1,692,033 people were working in the sector in September, 55,960 more than the same month in 2019.

Meanwhile, hospitality and commerce continue to suffer, between them losing 67,000 contributors in September alone. In annual terms, the hospitality sector has lost 241,000 jobs this year, which is a fall of nearly 17% on last year, while commerce has shed 76,700, a fall of 3%.

The strong data for September is not sufficient to compensate for the losses due to the pandemic, with nearly a million jobs destroyed in March and April. Since the month of May, 447,367 of those posts have been recovered, less than half of the total lost. In annual terms, there were 447,062 fewer workers signed up with Social Security compared to last year.

“The figures for September are good,” said Valentín Bote, from Randstad Research, speaking to EL PAÍS via telephone. “They contribute to alleviating the impact of the crisis, but we are still far from being able to see a similar scenario to that from before the pandemic. In fact, macroeconomic experts are not predicting a total recovery until the end of 2022.” What’s more, there will be ongoing uncertainty related to new outbreaks and the restrictions that will have to be implemented to combat them.

In the last three months, unemployment has fallen by 86,000 people, but that figure is insufficient to compensate for the impact of the pandemic. The total number of registered unemployed has risen to 3,776,485 people, nearly 700,000 more than the level seen in September 2019 and 530,000 more than in March.

In September, 1.6 million new work contracts were signed, 22% down on the same month in 2019. For the year so far, hirings are down 31% compared to the same period last year, for a total of 11.6 million – 500,000 fewer than in 2019.

“There are 7.5 million jobseekers,” explained Valentín Bote, in reference to those who are out of work and seeking a job, as well as those who are seeking a job despite being employed. “This is a very significant figure because it comes in the context of a 31% drop in contracts, indicating that there are fewer job opportunities. This will make it difficult for these people to come off unemployment in the coming months,” he concludes.

English version by Simon Hunter.


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