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Number of unemployed in Spain falls back below 3.5 million

Number of unemployed in Spain falls back below 3.5 million

Number of unemployed in Spain falls back below 3.5 million

Date Published: 03/08/2021

331,486 remain on ERTE furlough schemes at the end of July

Number of unemployed in Spain falls back below 3.5 million

Unemployment registered the largest monthly decline in history during July with 197,841 fewer unemployed than during the same month last year when the country was emerging from its first covid lockdown.

Summer is usually very positive for job creation in Spain due to the increased demand for staff in the services sector during the holiday months and the 2021 data for July corroborates this: unemployment has registered the largest monthly drop in its history.

In addition, the Social Security system gained 94,451 contributors in July compared to June, which brought the total number of those employed and paying into the social security sytem to 19,591,728 contributors, according to data from the Ministry of Inclusion, Social Security and Migration published this Tuesday (August 3).

This brings the level of affiliation to its highest in the historical series, but it must be taken into consideration that this includes the 331,486 people remaining on the ERTE system, who technically count as employed even though they are currently not working due to the covid situation.

This improvement in the labor market will support the post-covid recovery of the Spanish economy during the months in which the labor market tends to enjoy greater support due to the arrival of summer, a season closely linked to tourism, a very labour-intensive sector.

Spain’s GDP rebounded by 2.8% in the second quarter of the year, although the figures for July are included in the third quarter statistics.

The number of unemployed registered in the offices of the public employment services (formerly Inem) fell by 197,841 during July (-5.47%), which represents the largest drop in any month in the historical series and exceeds those of the months of May and June which also registered record falls.

In May, the reported fall in unemployed was 129,378 and in June the figure was just under 167,000.

In addition, the month of July ended with a new minimum of 331,486 people assigned to the ERTE temporary redundancy scheme. This means that 90% of the people who were in ERTE during the worst of the crisis have already returned to work, according to data from the ministry. However, it must be stressed that the unemployment data for July does not include the 331,486 workers adhered to the temporary regulation file of employment (ERTE) scheme, since the definition of registered unemployment does not count them as unemployed.

It has to be presumed that a number of these jobs have been lost altogether and that these workers will not be taken on again by their former employers; there have been comments that some of these employees are being left on the ERTE scheme simply to give their employees time to gather redundancy money and in the hope that the government may offer some fiscal incentives to companies likely to make the staff remaining on the ERTE scheme redundant.

Fewer than 3.5 million unemployed

With the drop in unemployment during July, the total volume of unemployed reached 3,416,498 at the end of the seventh month of the year, under 3.5 million unemployed for the first time since the pandemic began and restrictions were implemented in Spain.

In seasonally adjusted terms, registered unemployment fell by 191,756 people in July.

In the last year, unemployment accumulated a decrease of 356,536 unemployed, which represents 9.45% less than a year ago.

Unemployment decreased in July in all sectors

Registered unemployment in the Services sector fell by 133,658 people (-5.29%); in the group without previous employment it fell by 31,991 people (-9.46%); in Industry it fell by 13,158 people (-4.60%); in Construction by 10,154 people (-3.62%) and in Agriculture it was reduced by 8,880 people (-4.82%). •

In absolute terms, registered unemployment in July fell more among women, with 104,891 fewer unemployed (-4.94%) compared to the previous month. The total number of women unemployed is 2,017,719.

Male unemployment stands at 1,398,779, falling by 92,950 men (-6.23%).

Six Autonomous Communities now have even less unemployment than before the covid pandemic (Galicia, Extremadura, Asturias, Castilla-La Mancha, the Balearic Islands and Cantabria) and unemployment fell during July in all of the 17 autonomous communities.

In absolute terms, the greatest falls corresponded to Andalusia (-69,159 people), Catalonia (-37,548 people) and the Canary Islands (-20,374), all regions with a strong summer tourism tradition.

1,838,250 work contracts were registered in July, of which 165,500 were permanent, the remainder being temporary.

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