Labour: unemployment, temporary employment, and low wages, the endemic evils of the Spanish labor market
High unemployment - especially between young people - compared to other European and world countries, a high temporal aspect, and low wages, are three of the labour burden matters that Spain has dragged on for many decades. Burdens that the current health crisis has only aggravated and raised many questions. The most important question is how the country will emerge once the protection umbrella that the Spanish government activated at the beginning of the pandemic - the furlough scheme – closes, in order to prevent unemployment from reaching record numbers. "The moment the tap is turned off [the furlough scheme is abandoned], unemployment will skyrocket", the UB professor of labour law, Jordi García, assured the ARA this week when the unemployment data for November was published.
According to the latest Labour Force Survey for the third quarter of the year, currently the unemployment rate in Spain is 16.3% (in Catalonia it is 13.2%). In just one year it has grown by 2.3 points, the largest increase since the first quarter of 2012, in the midst of the relapse of the banking crisis.
If the focus is only on youth unemployment, that is, those under 25 years of age, the percentage still shoots up much more. Normally youth unemployment always doubles the global unemployment a country has; in the case of Spain, the figure, however, is higher. At the end of September, 40% of young people were without work, the highest percentage since the beginning of 2017. More - even more worrying - news: currently 16% of households have all their members unemployed.
Excess of temporary contracts
To these figures we must add that Spain is the European country that is suffering the most from the impact of the pandemic on labour aspects. According to Eurostat data for the second quarter of the year, the State has eliminated more than twice as many jobs in one year (-7.6) than the European average (-2.9%), and leads the sad ranking of being the country of the Old Continent with higher temporal contracts (27%). This is one of the endemic ills that it suffers in both crisis and boom times, but it makes its labor market more vulnerable to the current economic situation. UB Applied Economics professor Raúl Ramos pointed out to this newspaper that the solution to this problem is to eliminate temporary contracts. "This would require a legislative change with lower dismissal costs, as well as a lot of pedagogy among the business sector", he explained.
As for Spanish salaries, they are still below the European average. According to Eurostat data, the average gross salary in the EU in 2019 was 2,172 euros, while in the State it was 1,694 euros. A worker from Luxembourg, the top country, earns twice as much (3,240 euros) as a Spaniard, although cost of living, of course, is also higher. Where there has been an important change is in the increase in the inter-professional minimum wage, which in 2019 rose by 22% and is now 950 euros per month.