According to the data from May of Social Security affiliation and registered unemployment, the situation of the labor market is like that of a boxer who has just been knocked down by the harshness of the rival’s blows: it’s on the floor, but at least they don’t hit him anymore; there is even the possibility that it will rise.
Make no mistake: the data is tragic. The number of members (18.5 million) fell to 2017 levels. The year-on-year drop in membership (-4.6%, after the destruction of 886,000 jobs), is the deepest since January 2013. For the Services, its fall (-4.8%, which is equivalent to the loss of 707,100 jobs) is the most serious recorded by the statistics.
Contract signing plummeted again, now with an interannual decrease of 59%, the second largest decrease recorded by the statistics. It is a setback that doubles that recorded in April 2009, which was the worst result of the previous crisis. 850,600 contracts were signed in May, the second lowest figure since August 1998.
76,700 permanent contracts were signed, 58% less than a year ago, and even a figure that is 14% lower than those signed in May 1998. The signing of this type of contract was reduced in 14 of the last 18 months.
The number of unemployed rose to 3.86 million, 25.3% more than a year ago. In addition, it is the highest number of unemployed people since May 2016. Young people and immigrants take the brunt, with year-on-year increases in the number of unemployed of 35.9% and 35.8%, respectively.
Despite the above, the truth is that the data is a little better than expected. The number of affiliates increased by almost 100,000 people compared to the previous month (+ 0.5%), despite the great restrictions on mobility and economic activity. The group of unemployed grew by 14,000 people in one month, compared to almost 27,000 the previous month.
If we consider that the seasonality It is favorable (these are the months when more jobs are created in Spain) and that the restrictions derived from the state of alarm are being lifted (although unevenly in different places), an optimistic interpretation is that the labor market could be establishing a floor (the boxer on the canvas), from which to start a timid recovery (for the boxer to get up).
Get it right: the job market is in a critical situation. There are 2.6 million employees in ERTEs due to force majeure and 1.4 million self-employed workers receiving the cessation of activity benefit. With a fraction of both groups going into unemployment, the situation would be much worse: the boxer could get up to be punished again by the rival. It is something that we cannot completely rule out.
The paradox is that the biggest enemy of the recovery of the economy is the government itself. His threats to completely suppress the labor reform and to increase taxes up to the equivalent of 7% of GDP (about 80,000 million euros, according to the proposal of Vice President Iglesias in the Congress “recovery” Commission) or the approval of the Bolivarian Minimum Life Income, which makes public accounts even more unsustainable, are examples of why it is increasingly difficult to invest and contract in Spain.
Nor will it save us Europe: Your money will only start arriving in 2021, subject to conditions that we do not yet know. In addition, if we subtract what Spain must contribute, the 140,000 million euros promised remain in some 35,000 million.
If the government interprets the relative respite given by the May labor data as the worst left behind and prioritizes its Bolivarian and ideological agenda, the mistake would be extremely costly: boxing would become wrestling and even fallen on the ground they could keep hitting us. @diebarcelo