AIReF says official unemployment rate does not reflect reality

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Technically, for statistics in Spain to consider a person unemployed, he or she has to meet the administrative requirement of being registered with the SEPE (State Public Employment Service) and be in a position to immediately enter the labour market, which means that millions of unemployed people are lost in the statistics of job seekers.

The official unemployment rate stands at 12.8%, which includes three million unemployed people, according to the EPA (Labour Force Study). But the figures produced by the INE (National Statistics Institute) leave many workers by the wayside and these people, if counted, could raise the figure to five million, in a broader concept of the term.

AIReF, the Public Administrations’ supervisory body, calculates that the rate of underutilised workers, which includes the officially unemployed, people who are involved in temporary redundancy proceedings (ERTEs) or workers in part-time employment who want to work more hours, is 18% of the active population.

According to agency sources, the traditional unemployment indicator no longer reflects the reality of the labour market. The SEPE and EPA registers do not record the entire population that would be willing to work. In order to get a complete picture of the labour market, AIRef technicians have started to use other sources of information, including, for example, the new employment models with few hours of daily work that are not included in the main statistics.

Since Yolanda Díaz’s latest labour reform came into force, employment and unemployment figures have become the subject of controversy. Think tanks such as Fedea and BBVA Research point out that the figure of the fixed-term contract, which has grown at the expense of workers with temporary employment, hides more than half a million unemployed, who have an employment contract but do not, in effect, work.

AIReF sources say that it is too early to draw conclusions about the impact on the labour market, but several phenomena have been occurring for years that point to a reduction in the number of hours worked. Last February, the Bank of Spain published an extensive report on the subject. The average working week per worker has gone from 37 hours in 1987 to 31.8 hours in 2019.

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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.