Spain is one of the OECD countries whose labor market is being hit harder by the crisis, and its unemployment rate at the end of the year could approach the 20% threshold or even exceed it in the event of a second wave of the coronavirus. In its annual employment outlook report published on Tuesday, the Organization for Economic Cooperation and Development (OECD) recalls that after strong increases in unemployment in March and April, unemployment stabilized in May at 14.5%.
The situation will continue to deteriorate in the coming months, given that almost three million workers in May were covered by an ERTE, which represented 18% of salaries, compared to an average of 25% in the OECD.
The study authors hope that a peak of unemployment is reached in late 2020, provided there are no new outbreaks of the pandemic. In this first scenario, the unemployment rate would be 19.2% on average this year and could begin to drop to 18.7% next year. But in the second hypothesis, the figures would rise to 20.1% in 2020 and to 21.9% in 2021.
The fall in employment in Spain this year will be one of the most intense in the member countries, of 5.28% in the event that there is no second wave of the pandemic and 6.37% if that occurs, compared to an average of 4.09 and 4.98%, respectively, for the OECD as a whole. Worse figures are only expected in Portugal, Ireland, the United States and Colombia.
The director of Employment, Labor and Social Affairs of the organization, Stefano Scarpetta, reminds Efe that Spain the crisis began with a very high level of unemployment, second only to Greece. The collapse of activity is being one of the most pronounced due to the severity of the containment measures and the strong specific weight of some of the sectors that are being particularly affected by the COVID-19 shock, such as tourism.
The drop in gross domestic product (GDP) will be 11.1% in the least unfavorable case and 14.4% in the most negative scenario.
On the other hand, in its report the OECD highlights that Spain explicitly prohibited companies from firing workers while participating in the ERTE, as well as for a short period afterwards. “As the economy reopens, the reintroduction of stricter conditionality for companies should be considered,” he recommends.
Scarpetta advocates introducing a greater differentiation in the use of the different temporary employment protection schemes, such as the ERTE, with greater conditionality in the case of those sectors in which activity has resumed and maintaining support for the other sectors . “Freezing layoffs carries a risk that employers will resort to temporary contracts, increasing the duality of the labor market,” he says.
Increased risk of contagion
55.9% of Spanish workers carry out their work activity in an environment at risk of contagion by coronavirus, the highest percentage among OECD countries, which register an average risk of 48.1%, as a consequence of the high degree of physical proximity between work colleagues and the highest frequency of interaction with the audience.
“The proportion of workers employed in jobs at risk varies from 39% in Luxembourg to 56% in Spain, reflecting the differences between countries in terms of occupational composition,” says the institution.
In this sense, the OECD warns that women and younger workers are relatively more likely to work in jobs with a higher risk of contagion in all OECD countries. The same is true for low-income workers, who most often engage in jobs that expose them to physical contact and an increased risk of infection.