Jobless claims hit new record highs at the start of the year
Economy shed 8,500 jobs a day in January
Unemployment, the true scourge of the Spanish economy, hit new record highs at the start of the year as the government’s austerity drive left the economy in the throes of its second recession in barely three years.
According to figures released Monday by the Labor Ministry, the number of jobless claims in January rose by 132,055, or 2.72 percent, from the previous month to 4.98 million. The secretary of state for social security, Tomás Burgos, noted that January is traditionally a bad month in the labor market after temporary hiring for the Christmas holiday period.
According to the National Statistics Institute’s Active Population Survey (EPA) for the final quarter of last year, unemployment has actually risen to just under six million, with the total jobless rate rising to 26 percent. The EPA is considered a better gauge of the true state of the labor market than jobless claims.
The number of people affiliated to the Social Security system declined by 263,243 from December, meaning that the economy shed about 8,500 jobs a day in the first month of the year. Compared with January 2012, the Social Security system lost 778,829 contributors.
The irony should not be lost on the government that its belt-tightening push is exacerbating the task of reducing the public deficit as fewer people contribute to the system and more people take from it in the shape of unemployment benefits. The number of people receiving unemployment in December rose 1.0 percent from a year earlier to 2.957 million for a coverage rate of 64 percent. Payments for December amounted to 2.645 billion euros.
For the whole of 2012, spending on jobless claims amounted to 31.678 billion euros, almost 3.2 billion more than had been budgeted for, adding 0.3 percentage points to the public deficit. The government had forecast a decline of five percent in outlays on unemployment benefits when the actual figure showed an increase of 5.6 percent.
At the same time, the state pension system suffered a deficit of 5.8 billion euros in 2012, obliging the government to draw on its reserve fund to maintain payments. The total shortfall in the Social Security system for last year was close to 10 billion euros, or one percent of GDP.
