Spanish Labour Market 2020: The Year Of Massive Destruction In Employment

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Bankia Estudios | Marked by the pandemic and its huge impact on economic activity and employment, the year 2020 ended with the loss of more than 100,000 Spanish companies. Also a drop of 360,105 Social Security affiliates – the first decline in seven years – and an increase of 724,532 unemployed. Also to be added are 755,613 workers under temporary lay-offs programmes and 349,342 self-employed receiving extraordinary unemployment benefits. So in other words, more than 1.1 million people who, although technically still considered employed, are not actually working or are working reduced hours. In the short term, the probability that a large part of these jobs will be reactivated is low, given that the new restrictions being implemented to contain the spread of the pandemic are complicating the recovery of activity.

Average affiliation to Social Security continued in December the upward trend that began in May, although it grew by just 0.1% month-on-month (+26,432 persons), the most modest rise in four months. This is the worst December since 2012 (+31,660 in Dec-19). On a year-on-year basis, however, total registration fell by 1.9% in 2020, down 360,105, which is the first decline since 2013. Hotels, restaurants and tourism activites as well as arts and entertainment services, with decreases of 19.3% and 15.6%, respectively, are the sectors where the most employment has been destroyed in the last year.

As fas as furloughs are concerned, year 2020 finished with 755,613 workers affected (5.2% of those affiliated to the General Regime), a fall of 95,607 compared to the previous month. Compared to the most severe moment of the crisis (end of April), the number of employees in termporary lay-offs fell by 2.86 million, which means a drop of 79%.

According to the type of furloughs, the transfer from the “old schemes” approved in March to the most recent ones in force since September 30, which include greater benefits for the activities most affected by the crisis, has continued in December. The new ones now account for 61% of the total.

On the other hand, the number of companies registered with the Social Security in December recorded the second consecutive drop, almost 7,000 to below 1.39 million, the lowest figure in seven months and very far from pre-Covid levels: since February, 101,258 companies have been lost.

Registered unemployment has risen in the last three months of 2020; whatsmore, December’s increase (+36,825 or +1% month-on-month) is the first in that month since 2011 (-34,579 a year ago). In seasonally adjusted terms, the record is also bad, the worst since June: +76,387 unemployed.

As a result, the total figure of unemployed is close to 3.9 million, the worst year-end since 2015. This represents an increase of 22.9% year-on-year (724,532 more unemployed), which interrupts seven years of continued decline. Furthermore, one has to go back to 2009 to find a greater increase.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.