September 20, 2020

Outbreaks and attacks on tourism destroyed almost 200,000 jobs in the last week of July


Madrid

Updated:

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The unemployment and affiliation data known yesterday brought with it the best month of July in many years. Figures that at first glance might seem that our country would be close to job recovery. However, such a statement seems daring more than anything else, as there is data indicating that such a recovery is a long way off. First of all, as reported today by ABC, today only 17% of the real employment that has been lost due to the coronavirus crisis has been recovered.

The numbers also invite caution when observing the evolution of membership during the month of July. It is true that the average brought with it a growth of 161,217 jobs, but this increase was conditioned by a key factor. The end of the state of alarm, the economic reactivation and the reopening of borders encouraged service companies, especially those linked to tourism to hire. Thus, the hospitality industry, for example, had 66,924 more affiliates in July than the previous month, which represented a growth of almost 6%. The bad news, however, is that compared to the previous year this sector has almost 260,000 fewer affiliates, which is 17.55% less.

Employment growth was linked to the aforementioned factors and also to the summer high season. Thus, there was an important growth because the hirings that normally were made for the summer from May, were delayed to July before the economic paralysis. This is also observed in the temporary employment, where more than 90% of the more than 1.5 million signed contracts were temporary.

Within the July data, we must also observe a fact that can serve as a warning of what is to come, and which is also related to the temporary nature of the contracts. But also with the situation of tourism and the pandemic.

During the last week of the month nothing more and nothing less was destroyed that almost 200,000 jobs. And it is that despite the reopening of borders and tourism encouraged hiring, since outbreaks throughout Spain increased, the United Kingdom imposed a 14-day quarantine on anyone arriving from our country (being the main issuer of tourists) and other countries recommend not to come, employment has fallen considerably.

The day with the most members in Spain was Thursday 23, with 18,869,125 people. However, from that day on coronavirus outbreaks grew throughout the Spanish territory and that weekend the UK quarantined. These events caused that in the last six business days of the month, membership only grew in one (Monday 27, with 11,130 discharges). The rest of the days employment fell, highlighting the last day of the month, where there were 177,982 casualties. In the end, on July 31, Spain had 18,673,847 members.

Not because of the calendar effect

That the last day of the month the affiliation falls is not news, since it usually does it in more than 100,000 people especially if the first business day of the new one does not fall on Monday. This is a direct consequence of temporary employment. The contracts are increasingly precarious and have less duration, months, days and even hours, which causes the ups and downs to Social Security to fluctuate abruptly throughout the month.

In some cases companies hire a worker who is fired at the end of each month and again hired at the beginning of the next. It is an unethical practice, often illegal, that has always been under the magnifying glass of the Inspection, with unsatisfactory results in view of the results. For a company to be able to chain contracts, it must have a cause that justifies the need to cover temporary employment, but if these are jobs that have to be covered throughout the year, or during a specific stage, the legislation requires them to be fixed.

The last business day of the month was Friday the 31st, so the fall in employment could have been alleviated by the calendar effect. It was not so. For example, in May and February the last business day of the month was Friday and the fall of employment on the last day of 23,964 and 25,434, respectively. In another month where the last day of the month was midweek, as in June, there were 161,500 casualties, similar to the July numbers, but lower.

How the next few months will be in terms of employment will depend on the health situation. Thus, August, which in recent years has shown poor data for employment by the end of the summer, could become worse if the restrictions on tourism continue and the epidemiological situation gets out of control.

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