April 10, 2021

Job creation suffers in January

Job creation suffers in January

As usual in the month of January, the end of the Christmas campaign has taken its toll on employment, leaving us with important declines in Social Security and rising unemployment. Undoubtedly, the change of year has meant the end of many contracts subject to the duration of a work or the provision of a service; and, if this were not enough, we have entered the winter, the worst time for such a seasonal market for employment as is Spanish.

I think nobody is surprised by the data we have known today, the worst month of January for employment since 2014.

According to data released by the Ministry of Labor, unemployment increased by more than 83 thousand people (increasing by more than 20 thousand data in January 2018) leaving the number of unemployed at 3.28 million. Also, and probably the most important data of those known today, the number of contributors to Social Security has been reduced by 204 thousand members compared to 178 thousand in the same month last year, leaving 18, 8 million the number of affiliates .

By sectors, the only one that has created employment has been construction (+ 2.4%), while agriculture, industry and services have lost employment, highlighting, as usual, the services sector with a loss of, 3, 8%

I would like to highlight in addition, a fact that for the future may be relevant, and that we must observe its evolution, and is the impact of the increase of the minimum wage in the under 25 years; last year in the same month, unemployment in this group had an improvement of 0.2% and this year has increased by 4.1%, that is, there have been more than 10 thousand young people who have lost their jobs.

In recent days, and on the occasion of the Fourth EPA of 2018, he wrote an article where he referred to data and facts that predicted a dark 2019 for the economy and therefore for employment (falling GDP, falling public and private consumption, increases of wage costs, lower national demand, lower corporate profits, lower exports, as a result of the cooling of the world economy, etc.), but there is also some aspects that will improve in 2019 and that they will make the slowdown in the creation of employment less abrupt than what could be expected in the beginning: we observe a cheaper euro than in the same month of the year 2018, the same goes for crude oil; if budgets are approved, we will have a more expansive fiscal policy than in 2018, salaries have generally grown compared to the same month last year and we see that the utilization of productive capacity is higher than last year. This side of the coin means that, maybe as we said earlier, the fall is somewhat softer.

Another reason that I think will influence the fact that employment holds the rate better than our economy, and that the fall is not very abrupt, is the labor reform that was introduced in 2012. This reform has benefited that Spain continues to grow above 1% in its GDP and can create employment; before the reform, we needed to grow to 3% for the job to improve.

Another problem that we will face this year will not only be job creation, but also the quality of this one As an example, in 2018, some 22.3 million contracts were signed, of which only about 2 million have been indefinite and the temporary rate has been increasing every year, reaching 27%, one of the highest in Europe. There is no doubt that beyond the seasonal nature of our labor market, the culture of temporality (not only occurs in the hospitality industry or trade, but also is present in sectors such as education or health) is very impregnated in the culture of Spanish companies. Perhaps, and as Calviño said the other day, the time has come to implant in Spain "the Austrian backpack" as a way to neutralize the polarity of our labor market and why not, improve the future of our pensions.

We must continue vigilant with the employment statistics in our country, to avoid that it deteriorates and can lead us to quotas that nobody wants to see, because stability in it leads to improve social welfare rates in our country.


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