Spain suffers from a large reduction in employment due to the Covid-19

Jose Luis Barceló, El Mundo Financiero (Spain)

Small companies and self-employed workers are most common type of employment in Spain, a country focused on the tourism and services sector as the pivot of its economy. And the consequences of lockdown for more than 50 days become visible.

 

In Spain unemployment has registered a historical increase in April reporting 3,831,203 newly unemployed, the highest number in the historical record since May 2016. This data represents an increase of 7.97 percent compared to March.

Another alarming figure is the number of recipients of unemployment benefits, according to sources from the Ministry of Labor and Social Economy that have been released today, the number of beneficiaries has exceeded 5.2 million, including those affected by temporary records of temporary employment regulation.

With this increase in beneficiaries, the monthly payroll of unemployment benefits has risen to 4,512 million euros, which is 207.15 percent more than in April 2019.

On the other hand, according to the Ministry of Inclusion, Social Security and Migration, Social Security recorded a decrease of 49,074 affiliates last month, and the total number of employed persons in Spain fell to 18,396,362.

This reduction is much lower than the one registered in March, when employment fell by almost 834,000 workers. If the effect of the coronavirus pandemic is analyzed from mid-March, when the state of emergency was declared, until the end of April, the loss of people registered workers was 947,896 people.

In terms of average affiliation (which is the one that had been published before the health crisis), Social Security registered a decrease of 548,093 employed persons compared to March (-2.9%), reaching the average affiliation at 18,458,667 people.

The rise in unemployment in April is lower than the one registered in March, when unemployment rose by more than 302,000 people, registering its highest rise in any month in the entire historical series. Despite this, the rise in April this year is the highest ever recorded in this month in the historical series. More than 243,000 people surpassed what until now was the biggest rebound: that of April 2009, when in the midst of the economic crisis unemployment rose by almost 40,000 people.

The unemployment data for April does not include workers who are suspended from work or reduced hours as a result of a temporary file of employment regulation due to Covid-19.

April is usually a month when the unemployment rate decline. This was caused by the contracts concluded during the Easter holidays, which accumulate a lot of hiring in hotels and restaurants. Since 1996, there have only been increases in unemployment in April during the economic crisis un 2008 and 2009, with increases of 37,542 and 39,478 unemployed, respectively.

In seasonally adjusted terms, unemployment rate rose in April by 370,173 people, while in the last year it accumulated an increase of 667,637 people, 21.1 percent more.

The Ministry of Labor it has explained that “the effect of the health crisis caused by COVID-19 began to have a notable impact on the unemployment rate registered from March 13, with special intensity during Easter.” But they assured that “in the last weeks of April unemployment has slowed its growth rate.”

The health crisis due to the COVID-19 pandemic affected, primarily the service sector, where the number of unemployment increased by 219,128 people, 8.76 percent. In the industry this number hit 8.92 percent, in construction it increased by 25,055 people, 7.84 percent, in agriculture by 4,015 people, 2.52 percent.

In addition, the unemployment rate rose in all the autonomous communities, the hignest numbers was recorded in Catalonia (50,763), Madrid (41,263) and in the Valencian Community (38,115).

Recently, various government sources have estimated during their press releases. that the unemployment rate could soar to 19 percent by the end of 2020.