In the last quarter, the labor market has reached at least three historic milestones. The first milestone was achieved at the end April when Social Security reached 20 million affiliated members for the first-ever time. After thirteen years of being unable to reach it, the barrier of three millions unemployed was reduced in May. The month of June was also the one with the most permanent contracts: nearly 800,000. This has enabled almost 80% of the current workforce to secure a job.
All this was in the context of high inflation and a war in Ukraine. We speak with some surprise about the resilience of employment because ups and downs in an economy have had a rapid effect on the labor market. But now the market is resisting.
One thing is certain: the unemployment rate has not improved over the past two years. Despite the fact that unemployment has fallen significantly, it is alarming that long-term unemployment continues to rise. It increases if it exceeds one year and more quickly if it exceeds four years without any job searches. It has even become chronic following the pandemic.
More than 3.1 million Spaniars want to work but are unable to, and 1.5 million of them have been there for over a year according to the Active Population Survey data. This is a higher number than that given by the ministry, as not all unemployed are registered. This is almost 130,000 more than the number before covid-19 was established. It also means that 47.4% of the unemployed are considered long-term.
Not only that, but Spain has been holding on to more than a million unemployed long-term for thirteen years. This is because there have been two major moments of job creation during this period (the 2014-2019 and 2021-2022 periods after the financial crisis) and this group has not been able reintegrate. They are the forgotten.
It was stated that the labor reform had been primarily focused on limiting the temporary employment, the ERTE (‘insiders) of the labor market, but has partially ignored the ‘outsiders (unemployed), especially long-term ones. Alejandro Costanzo regrets, as director of Asempleo’s technical office, which represents temporary employers.
Time is dangerously against us in this instance: The longer someone remains unemployed, then the more difficult it will become for them to find work. In the case of the pandemic, there was a long year with paralysis and no hope of recovery. According to Asempleo data, an unemployed person who was unemployed for less then a year was three times more likely than someone who has been unemployed more than a decade.
The long duration of unemployment is a negative indicator for social protection. It decreases with each passing month and the unemployment benefit can be withdrawn even after two years. This is the worst case. According to CC OO data, 35% of unemployed (more than a million) do not receive any assistance. This could be because they have exhausted the right to benefits or because they have not contributed enough.
It is no surprise that nearly a million people have been searching for impossible jobs for the past two years, 57,000 more than 2020. Even though the search takes four years for 628,000 people, it’s the same for one in five unemployed. According to Adecco, this group, which has seen three quarters consecutively of increases since 2014, is dominated by senior workers and people with low qualifications.
Spain is now not only the European country with most unemployment, which is double the average across the entire community, but also the highest in long-term unemployment. Spain is home to 30% of Europeans who are currently unemployed and have been searching for work for over two years. Spain has more long-term unemployed than any other country, including Sweden, Denmark Finland, Poland and the Czech Republic. This is a total of 17 countries.
For more than four years, the most common profile of an unemployed person is one who is a woman, older and without any training. Two out of three long-term unemployed women are females, and more than 400,000 of them are over 50. The ability to leave unemployment is inversely proportional with age. In other words, people over 50 are more likely not to be unemployed for longer than 12 months consecutively.
The same applies to training. The unemployment rate currently stands at 13.6%. It doubles to more than 26% for people without education. However, it is half for students who have completed university. Only 7.7% of those who cannot find work are eligible for this reduction.
Education is the greatest weapon against unemployment. Only 40% of current unemployed have access to training or access. This is the greatest challenge.
