Labour market

Madrid has more unemployed than before covid; Barcelona has fewer

The state capital and Alicante are the only large cities where the number of unemployed has increased since the beginning of the pandemic

3 min

"Unemployment data are positive because Madrid continues to pull Spain forward". These are the words of Madrid mayor José Luis Martínez-Almeida (PP), when last December's unemployment figures were released. In the same vein, the president of Madrid region, Isabel Díaz Ayuso, assured via Twitter, among other statements, that "Madrid leads the reduction in unemployment in Spain in December".

But are Madrid's leaders really right? And which major Spanish cities have overcome the pandemic in the labour market? ARA has taken unemployment data for February 2020, just before covid broke out, of the 30 cities with over 200,000 inhabitants in Spain and compared them with the number of unemployed last December, the latest published by the State Employment Service (SEPE) – January data broken down by municipalities has not yet been released. The result of the comparison is that only two cities have more unemployed in absolute figures than before the pandemic. These are Madrid and Alicante. The former has 3% more and the latter, 6% [see graph]. Unemployment in Barcelona, on the other hand, has dropped by 10% in this period.

The data is especially surprising when there is a tough political campaign to highlight the virtues of the PP-governed Spanish capital and its management of covid, in opposition to Podemos-run Barcelona, accused of being an enemy of economic activity.

The reasons

From the productive structure to the loss of population

Both José García Montalvo, professor of economics at the UPF, and Raül Ramos, professor of applied economics at the UB, say that the reasons for the rise in unemployment in Madrid may be diverse. They cite the fact that the productive structure of the city may depend more on services, one of the major industries affected by covid restrictions, or the gain or loss of population during this time. "It may be that those who have remained [in cities] are the ones with the least employability," Ramos explains. Another factor could be seasonal, since in December, thanks to the Christmas campaign, unemployment tends to fall. However, if we take unemployment data for December 2019, when the coronavirus had not yet broken out, and compare it with last December, unemployment data in Madrid show there are currently 12,787 more unemployed, while in Barcelona the figure has dropped by 5,664 and in Seville it is down by 1,005.

In the case of Alicante, a possible explanation for the increase, experts say, would be its dependence on tourism, still far from recovering pre-crisis levels and, in particular, of holidays for the elderly organised by the Imserso.

Type of work

More part-time jobs than before the pandemic

"During the two years (almost) of the pandemic the jobs that have been generated have been mainly in the public sector and partly caused by the pandemic," explains Montalvo. The two areas that have provided the most jobs are two of those most directly impacted by covid: healthcare and education. However, Ramos recalls that despite the drop in the number of unemployed, the number of hours worked today is still lower than before the pandemic. "This means that there are more part-time jobs," the professor points out. According to EPA data, last year 30,266.4 million hours were worked in the state, 1,177 million less than in 2019, which closed with a figure of 31,443.4 million hours. The reason, Ramos adds, is that part of the service sector has not yet recovered due to the restrictions they still suffer and have suffered these last two years.

Labour law reform

Will it make layoffs more difficult and/or reduce precariousness?

Will the recent controversial labour law reform help to recover these hours and to overcome the precariousness that has been hanging over the Spanish labour market for years? Experts have different opinions on its impact. "What the reform will do is make firing costs more expensive, because companies that need temporary workers will have to give them an indefinite contract and when they no longer have work for them they will fire them," explains Montalvo. The UB professor of applied economics has another point of view. He argues that if temporary employment is reduced, the worker will have more stability and, in turn, more promotion options within the company. Time will tell which way the balance tips.