March 5, 2021

Effective unemployment is close to six million in Spain




The third wave of the Covid returns to leave dramatic data on the labor market, cornered by restrictions and confinements that continue to prevent the expected recovery of economic activity and employment. January it is a traditionally negative month for the occupation by the end of the contracts linked to Christmas and that of 2021, although atypical, it was not an exception. In the first month of the year, 219,000 jobs were destroyed, which left the total number of affiliates at 18.83 million, so that the system once again lost the level of 19 million contributors. Social Security has lost 335,014 members in the last year.

In line with this job destruction, there was also an increase in registered unemployment. 76,216 people signed up for the lists of the public employment services in January compared to December, which has left the total number of unemployed on the verge of the four million: 3,964,353. This is the official number of unemployed in Spain, but does it correspond to the real number? If employed persons who remain in ERTE, self-employed with extraordinary cessation of activity and groups excluded from the official register are taken into account, no.

«The harshness of the economic situation is clear if we take into account that the unemployment figure exceeds four and a half million -4,649,172 people– If we count those excluded from the official lists because they are taking training courses or are job seekers with limited availability or with a specific job demand, to which are added the nearly 739,000 who remain in ERTE as of January 31st ». This reflection was carried out yesterday by the CEOE, revealing a reality on which study services and various organizations such as Fedea have also spoken, which last August placed the effective unemployment rate in Spain at 22% of the active population.

In order to correctly weight the unemployment data, it should be remembered that the workers who are immersed in an ERTE are not counted as unemployed by this statistic; their employment is only suspended, although they are unemployed and receive a state benefit. The number of people under this protection umbrella stood at 738,969 at the end of January, representing an increase of 35,625 compared to December. If to this figure are added the self-employed who also charge unemployment, the so-called extraordinary cessation of activity, which in January amounted to 383,800, the effective unemployment would reach 5,087,153.

But the figure would increase even more and would be close to six million if these groups are added to the unemployed who take courses (291,197) and those with limited availability (393,622), both excluded from the statistics. This has many readings, but it is clear that those affected by ERTE belong to the sectors hardest hit by the pandemic such as the hospitality industry, to which the Government continues to deny direct aid, unlike what most of our European neighbors do. The Executive has been working on a plan for the sector for more than a month while the restrictions are causing a drain on closures and layoffs.

Yesterday’s data show that the resurgence of the third wave of the virus at the beginning of the year again affected the hospitality and service companies, which lost 37,000 and 36,000 contributors, respectively. Construction destroyed 21,200 jobs and the industry registered 13,000 fewer contributors than in December.

The year of the pandemic changed the course of the global economy and Spain suffered the scourge of Covid-19 more intensely than other countries, especially its companies. According to the number of listing accounts for December, the latest data available, the number of companies affiliated to the system fell again for the third consecutive month and stood at 1.38 million, 100,000 less than a year ago. The rate of destruction of companies touched 7% per year.

Entrepreneurs already foresee a tsunami of closures, especially small businesses and the self-employed, which already in 2020 they lost an average of 20,000 euros each. Some were able to resist, but others were forced to close the blind, surrounded by the economic downturn and subsequent restrictions and confinements.

The business fabric is very touched and this is what the Social Security data reflects. In January, no less than 14,668 freelancers were lost, which would be equivalent to a loss of 473 self-employed workers per day. “The employment data reflect the reality of the business fabric, exhausted economically and financially,” said Lorenzo Amor, president of ATA yesterday.

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