Unemployment falls for third consecutive month in Catalonia right before the tourist season

Third consecutive month of good news for the labour market. Catalonia ended May with 15.300 fewer unemployed and 37.300 new affiliates to the Social Security than in April. The two figures are relatively discrete variations, but important if one takes into account the scenario of pandemic that is beginning to be overcome. It is the most significant reduction in unemployment since last summer, the first time that the number of unemployed is lower than the previous year and that there are almost as many people in work as before covid.

This is shown by data published on Wednesday by the Ministry of Labour, which indicate that there are 481,817 unemployed in Catalonia, 3% less than in April. Compared to a year ago there are 1,300 fewer people out of work, which translates into 0.28% less unemployment. However, it is also necessary to take into account that in May 2020 the restrictions against covid were much tougher than they have been this last month, during which Catalonia restaurants have been serving dinners, cultural activities were extended until the evening and the people have been able to move freely around the country.

"The data are very logical, especially because of the vaccinations and the beginning of summer," says Jordi Garcia, professor of labour law at the University of Barcelona. "When activities are opened and opening hours are extended, [businesses] need people who are either no longer on furlough or newly hired: when you mobilise the economy, the labour market is reactivated," he says. In addition to this, May is usually a good month for the labour market because summer workers start to be hired.

In line with this, Catalonia is the second community in which the drop in unemployment has been most noticeable. However, the dynamic is widespread: across the State unemployment fell by 129,300 people, and stands at 3.78 million unemployed. According to the Ministry of Labour, this is the largest fall in unemployment since the historical series exists. It is, moreover, a decrease that is perceived in all sectors, although the one that accumulates the most significant reductions is the service industry. In the case of Spain, unemployment figures are also lower than those of a year ago. Specifically, 76,500 fewer jobless.

But there are several things that worry Garcia. The first is that the comparison is made with pre-covid figures which weren't great. The second is that everything points to the fact that this summer there will not be mass tourism. "The question is whether foreign markets will open quickly enough so that we have an acceptable number of tourists again to save the season," says the expert. And finally, that there are still many people on furlough .

Affiliation and furlough

At the moment, the affiliation data published by the Ministry of Social Security indicates that there are already 3.43 million employed in Catalonia and that the figure means recovering the levels that existed before the pandemic: in February last year there were 3.44 million people in work. In short, there are 37,300 more employed (+1.1%) than in April and in the last twelve months 120,800 new jobs were created, i.e. there are 3.6% more people in jobs than a year ago.

But in this case, Garcia also includes a nuance: it is not known whether these numbers include workers on furlough. "Those on furlough are still affiliated [to the social security]," he explains. According to the latest data, at the end of May there were 112,000 people in Catalonia in this situation. Although this represents 24,000 people fewer than in April, the permanent risk, in the eyes of this expert, is that the situation cannot continue much longer.

"As everything opens up, the effect will be much better, but the risk is that there are people who cannot carry on much longer," says Garcia, who confesses that he believes that the situation is being overcome, albeit not with flying colours.

Optimism in the government, alarm in unions

In contrast, Yolanda Diaz, head of the Ministry of Labour, is convinced of the "positive trend" of the data and said in an interview with RAC1 that this indicates that the economy is recovering step by step. The general director of Labour Relations of the Generalitat, Enric Vinaixa, also said that he understands them as a sign that the labour market "is recovering the strength that had before the pandemic".

Unions and employers were more moderate in their enthusiasm. Pimec, for example, has celebrated the recovery of the dynamics prior to the pandemic, but has warned of a "slower" recovery than elsewhere in the European Union and compared to the state average. CCOO, in turn, has denounced that the rate of temporality of signed contracts has risen, and UGT highlighted that there are still 86,600 more unemployed than there were before the start of the pandemic and that the figure, although it has fallen compared to last May, is 1% lower in the case of women.