Historic August unemployment drop in Spain

by Lorraine Williamson
falling unemployment

MADRID – The revival of domestic tourism in Spain caused a historic drop in unemployment during August. This decreased by 82,583 people to a total of 3.3 million unemployed. 

This is according to figures published Tuesday by the Ministry of Employment of Spain. The Spanish Social Security (Seguridad Social) lost 118,004 paying members in August. And the number of working people who pay social security contributions is currently 19,473,724. 

Previously, the months of May, June, and July were already the months with a historic decline in unemployment of 129,000, 167,000, and 197,000 respectively. Thus July showed the largest drop in unemployment of any month on which data has been tracked. Recorded unemployment in Spain has now fallen for six consecutive months. Consequently, the accumulated fall in unemployment since March 2020 amounts to 675,000 people. 

What is the seasonal effect? 

Although the decline in unemployment is good news, the seasonal effect plays a significant role. During the spring and summer months, tourism, and in particular domestic tourism, got off to a good start. This meant many more people had temporary work again. However, with the recent and not too promising forecasts from tourist organisations, this decrease in unemployment seems to be only temporary. Therefore, we will have to wait and see what the same figures say at the end of September. 

The seasonal effect is reflected in the significant drop in unemployment among young people under the age of 25. In August, there were even fewer young people officially unemployed than before the pandemic broke out. Unemployment among women also fell sharply in August. 

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Lowest number of people with ERTE since May 2020 

At the end of August, 272,190 people still made use of the ERTE scheme (temporary dismissal due to the corona pandemic) after a decrease of 17,120 people covered by this scheme in August. Moreover, these people are not counted as ‘unemployed’ by the ministry. Furthermore, it is also the lowest number of people in an ERTE scheme since the peak of 3.6 million people in May 2020. 

Decrease in most sectors

Unemployment fell in all sectors except construction. In fact, just over 1,000 people lost their jobs here. The service sector was the area where unemployment fell the most (-46,224). This was followed by the agricultural sector (-13,499). In the tourist regions of Spain, unemployment also fell. For example, Andalucia fell by 32,102 people, followed by the Canary Islands (-19,844) and Catalonia (-17,186). 

Positive about falling unemployment 

The Minister for Employment in Spain says she is very positive about the August figures. She even went as far as to tell the Spanish newspaper ABC that the biggest crisis in Spain is over. 

Various employers’ associations agree with the minister’s vision and indeed see a recovery in the labour market. Nevertheless, there are still many self-employed and companies in Spain that are far from over the crisis. 

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