Unemployment in Spain compounded by the effects of global Coronavirus pandemic

Ministerio de Trabajo, Migraciones y Seguridad Social
Ministerio de Trabajo, Migraciones y Seguridad Social

The number of people employed in Spain fell by almost 286,000 between January and March, according to figures released by the National Statistics Institute (INE) on Tuesday. That is the biggest fall in employment since the recession of 2012.

The first quarter is historically difficult for employment in Spain, but this year the figures are particularly poor and the blame is being attributed to the effects of the Coronavirus which almost brought the global economy to a complete standstill in March and April.

During the first quarter of 2020, the number of people claiming unemployment benefits increased by over 120,000 resulting in an unemployment rate of 14.4%. This number is twice the average of the other 27 European Union countries where the average rate of unemployment stands at around 6.5%.

The latest figures do not take into account the number of non-essential workers who have been sent home as part of ERTE (“Expediente de Regulación Temporal de Empleo”), a temporary scheme set up by the Spanish Ministry of Employment which allows employers to issue temporary redundancy to their employees as a result of the force majeure. More than 560,000 people have been affected by reduced hours or have been temporarily laid off.

Furthermore, the Instituto Nacional de Estadística (INE) has warned that the unemployment rate could be higher as many people who lost their jobs may have been classified as inactive which means that they are neither employed or actively seeking work. According to the INE there was a surge in the number of inactive people during the first quarter of 2020.

The increase in unemployment has been attributed to two factors. Firstly, the nature of the Spanish job market which is always tougher between December and March when the travel and tourism sectors are weak, and secondly, as a result of the Coronavirus which has resulted in Spain being locked down since the middle of March.