First year of coronavirus pandemic leaves 401,000 unemployed, 743,000 workers on furlough

The labor market gained more than 70,000 new Social Security affiliations in March, while jobless claims fell by 60,000

An unemployment office in Madrid.
An unemployment office in Madrid.Eduardo Parra (Europa Press)

A little more than a year ago, the Spanish labor market suffered an unprecedented blow from the coronavirus pandemic. The number of contributors to the Social Security system – which is considered a measure of job creation – started to fall on March 12, just days before the Spanish government declared a state of alarm to control the spread of the pandemic. Under this emergency measure, public-facing businesses were closed and all Spaniards were ordered to remain at home. By the end of the month, nearly 900,000 people had lost their job as a result of the lockdown.

The number of Social Security affiliations fell even further in February, when they hit their lowest point. From that moment on, employment figures began to recover but more than one year later have still not returned to pre-pandemic levels. According to new data released by the Labor and Social Security ministries on Tuesday, there are nearly 440,000 fewer contributors to the Social Security system than there were in mid-March, when the 18.9 million were recorded.

Meanwhile, unemployment has also risen during the pandemic. In the last year, 401,328 people have lost their jobs. In March of this year, the number of jobless claims fell by 60,000, pushing the total number of people registered as unemployed below the four-million mark.

However, the job market figures from the pandemic should be considered with caution, given the central government’s efforts to mitigate the economic fallout of the coronavirus crisis with public aid, such as the ERTE employment retention scheme and subsidies to self-employed workers. The furlough scheme, which allows companies to temporarily send workers home or reduce their working hours, but forces them to take them back after a certain amount of time, has prevented the massive job losses seen in other crises. Unlike other recessions, such as the 2008 financial crisis, employment figures have seen a smaller fall than the drop in gross domestic product (GDP) – largely thanks to the ERTE furlough scheme. According to the latest data, the number of furloughed workers reached 743,628 at the end of March this year.

“With respect to the worst moment of the [coronavirus] crisis, in April 2020, the number of furloughed workers has fallen 2.9 million, according to the date of registration,” the Social Security Ministry explained in a press release.

March is traditionally a good month for employment and this was also the case this year. The arrival of warmer weather and the Easter vacations mark the beginning of Spain’s strongest months for employment. The tourism sector starts hiring temporary workers for the Easter vacations and gets into gear for the summer high season. Although some doubts clouded the start of the season amid concerns over the rising coronavirus incidence rate in Spain, there were also signs of recovery. This, however, was dampened by the Easter restrictions on travel and social gatherings, which aimed to avoid a surge in new coronavirus cases as happened after measures were eased over Christmas. As a result, the number of new Social Security affiliations was lower than in previous years. According to the latest data, this figure rose by 70,790 in March – the lowest rise, with the exception of 2020, since 2013.

English version by Melissa Kitson.

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