September 26, 2020

Spain destroyed more than 210,000 jobs on August 31, the worst day of the year




The economic vice president of the Government, Nadia Calviño, announced three days ago, on August 31, that since July the number of affiliates in the general regime had increased by 333,000 people with data until August 27, so it would be necessary to subtract the net effect of the last day of the month, traditionally negative, to know the monthly evolution. Well, last Monday was the worst day of the year for employment, since 211,566 jobs were destroyed -216,235 if contracts are taken into account instead of people. The same day 331,332 contributors unsubscribed which, when adding those who registered, yields the worst balance in one day of the entire year.

Although the month of August is traditionally negative for employment, this time they started from such low levels that there was expectation to gauge the strength of the recovery. Employment grew again, albeit slightly, in August for the fourth consecutive month and for the first time in an eighth month of the year and added 6,822 contributors, reaching a total of 18,792,376 affiliates on average. the lowest figure in that month for three years. However, this figure softens the daily fluctuations, which show that on the last day of the month, normally negative when many contracts that depend on the high tourist season are canceled, these 216,235 jobs were lost, the highest number in a day since the 260,332 that were destroyed on October 31, 2019.

From the ATA autonomous organization they put on the table that 243,000 jobs were lost between August 28 and 31, “A figure that contrasts with the loss of 68,000 jobs registered on the same days in 2019.” “The situation of economic deterioration is so important that many companies are going to close and we are going to lose more than a million jobs throughout this year,” said the president of ATA, Lorenzo Amor.

In this regard, the Secretary of State for Social Security and Pensions, Israel Arroyo, specified in the press conference to explain the data that on the first day of September 150,000 workers have been recovered of the total number of employed persons who dropped out on the last day of August.

However, the figures are still lower than those registered a year earlier, when membership stood at 19,323,000 people, that is, there are 527,851 fewer members. Based on Funcas calculations, since May only 44% of the total employment lost in March and April was recovered.

In short, the Spanish labor market has not finished soaring after the heavy blow inflicted by the coronavirus pandemic and the closure of shops and businesses decreed by the state of alarm. Despite the fact that summer was trusted as a lifeline for the economy due to the arrival of foreign travelers, the restrictions imposed by other countries and the new outbreaks of infections and the appearance of new outbreaks have seriously affected tourism in the main months campaign for the sector.

Thus, the number of unemployed people increased by 29,780 people (0.79%) in the month of August in relation to the previous month, to a total of 3,802,814, according to data communicated by the Ministry of Labor.

Although the Government emphasizes that the rise in unemployment was the lowest recorded in August since 2016, the number of unemployed is the highest in that month since 2015. The recovery in employment seems slow since the total unemployment figures are well above those registered in the same month of 2019, when the number of unemployed amounted to 3,065,804. Consequently, the impact of the management of the coronavirus crisis drags a total of 737,010 more unemployed than on the same dates last year.

“August was a negative month due to the amount of temporary employment that had been created by the tourist season. As this year it was not created, it has not been destroyed as much as before», Summarizes the senior economist at Funcas, María Jesús Fernández.

But, if the tourism sector is at half gas, why has there been such a great job destruction on the last day of August? «The last days of the month are usually negative, but in crises they are worse. In addition, in the last year this would have softened in the case of August because the tourist season tended to lengthen», Explains Camilo Ulloa, Principal Economist for Spain and Portugal for BBVA Research. If it had been a Friday, as happened on August 31, 2018, the figure could have been worse: 304,642 contracts were destroyed on that day.

However, both the affiliation and unemployment data do not take into account the enormous number of people who are still covered by a Temporary Employment Regulation File (ERTE): 812,438, which is 306,104 less than in July. Of these 812,438 people, about 300,000, according to CEOE, come from tourism. From Work they calculate that three out of four employees at ERTE during the pandemic have already come out of this situation.

From ERTE to unemployment

Not all will have returned to activity. “Registered unemployment has gone worse than we expected. Probably there are people who were under ERTE or cessation of activity who have not been able to recover their work and have signed up for unemployment, ”says Camilo Ulloa, who points out that the evolution of benefits for cessation of activity shows a greater worsening in the case of the self-employed, since they are not reducing with the same speed as the ERTE.

As collected by ATA, although the average data for Social Security affiliation shows an increase of 402 self-employed during the month of August, «everything suggests that the data that we will know about the next days of affiliation on the last day of the month will be much worse, as the self-employed, as a general rule, withdraws from their activity on the last day of the month.

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