Unemployment falls to 20%, its lowest level since the summer of 2010

Once again, the summer holiday season has breathed new life into Spain’s ailing labor market. Over the last quarter, the latest figures show that unemployment has fallen by a percentage point to 20%, its lowest level in six years.

Nevertheless, unemployment remains stubbornly high in Spain, and is the second highest in the EU after Greece.

The number of people officially registered as jobless in Spain is now 4,574,700, a drop of 216,700 people compared to the same period last year.

Over the last quarter, around 271,400 jobs have been created, meaning that 18,301,000 people are officially in employment. The services sector has registered the biggest increase, gaining 227,300 jobs, with construction providing a further 45,600, industry 15,700, while 17,200 positions were lost in agriculture.

In the last 18 months, there has been a 10% increase in the number of temporary workers, from 3.4 million up to 3.7 million

By region, the biggest increase has been in the Balearics with 56,000 new jobs, Catalonia with 53,700, and Murcia with 28,400. Some 11,900 jobs were lost in the Canary Islands, and 4,200 in Navarre.

Spain has been harder hit by unemployment than most of the EU over the last eight years, and has proved unable to generate news jobs in large numbers. The country has endured a jobless rate of over 20% for almost six years.

Between the time that employment began to flag in 2007 and the moment it hit rock bottom in early 2014, one out of every five jobs in Spain was axed, representing nearly four million positions.

By early 2013, the jobless rate had soared to around 27%. From January to March of that year, more than 6.2 million people were without work.

Spain’s unemployment is so high partly because of particular local forces that have existed for decades. Unemployment above 20% is not uncommon in Spain. In fact, it has been at that level in three periods since Spain’s transition to democracy in the 1970s. And, ominously, from the previous unemployment rate peak in the 1990s, it took 14 years for it to decline to the wider European level.

But many of the jobs being created are temporary positions. In the last 18 months, there has been a 10% increase in the number of temporary workers, from 3.4 million up to 3.7 million. The temporary employment rate is now 25%, nearly 1.5 percentage points higher than in the same period last year.

Seasonal work has always provided an annual boost for the employment figures in Spain, and this time is no exception. But the fact that it remains so strong two years later shows that employers are still not confident enough about the future to offer permanent positions.

Other indicators give an idea of the impact of the crisis on Spanish households: there are now more than 700,000 households without any kind of income, and more than 1.5 million where no member of the family has a job. And there’s the matter of the country’s youth unemployment (those under 25 who are actively seeking jobs): an almost incomprehensible 45.5 percent.

By the end of the third quarter of the year, unemployment is expected to have continued falling, although in May, the Spanish government said it did not expect the jobless rate to fall below 15 percent until 2019.

English version by Nick Lyne.