Spanish labour market grows strongly after pandemic

by Lorraine Williamson
Spanish labour market
ASSSA

The Spanish labour market has become an unexpected strength of the economy after the pandemic. In the past four years, 1.6 million jobs have been added compared to pre-pandemic levels. 

Although this is less than in the previous four years (2015-2019) – when 2.7 million jobs were added – it is in a very different context: after an economic pandemic and with a war in Europe. 

Healthcare and labour market 

The labour market boom was largely driven by two sectors with a strong public employment presence. A quarter of the increase in social security enrolment since February 2020 has come from the health and education sectors. The two sectors became stronger during the coronavirus crisis but continued to show strong momentum in 2023. They added 405,000 workers compared to February 2020. They are followed by the ‘usual suspects’ of the Spanish labour market: hotels and restaurants. Accommodation and catering services added 153,000 workers, thanks to the full recovery in tourism, which did not conclude until 2023. 

Other growth sectors

Notable is the boom in consultancy and computer programming. This activity saw the relatively largest increase (up 36%) within the whole Spanish economy. There was also strong growth in social services, the category that includes workers caring for the elderly, disabled and children. 

The key players: women, 55+, foreigners and young people 

In these nearly four years, the upturn in employment has been led by certain groups that have made a special contribution to growth. Of the 1.6 million new workers in the past four years, 55% were women. Employment grew in all age groups except in the 35-44 age group, where the inflow fell by 355,000 workers. 

The group where most new jobs were created was the over-55s, with an increase of 790,000. Relatively speaking, however, the improvement in employment for the under-24s is striking, with a 29% increase in four years. There are now 300,000 more under-24s in employment than when the pandemic hit, a figure that has much to do with the fact that youth unemployment has never been lower. 

More than a third of new Social Security affiliates are non-Spanish. During this period, 550,000 foreigners joined the Spanish labour market. Of these, half are Colombians, Venezuelans, Moroccans and Italians. In contrast, the number of Romanian, Bolivian, Bulgarian and British workers fell. 

Cogesa Expats

Difficult years for self-employed

The past four years have not been particularly good for the self-employed. Self-employment barely increased (+86,500), mainly in the personal services sector such as hairdressing and fitness, construction, healthcare and advertising. 

Geographical differences 

Looking at the map of Spain, we see that 41% of the jobs created are in Madrid and Catalonia, two of the country’s economically strongest and most populous communities. Looking at relative growth gives a different picture. Madrid, the Canary Islands and Valencia are the regions where registrations have increased the most in percentage terms. In these three regions, the increase is around or above 10%. At the other end of the spectrum are the Basque Country, Asturias, Cantabria and Galicia, where employment increased by less than 5% compared to pre-pandemic levels. 

The public sector

A quarter of the 1.6 million new workers in Spain since February 2020 are public sector employees. A figure that matches the sharp increase in recruitment in education and healthcare. These two sectors account for about 75% of the increase in public sector affiliation. Moreover, 70% of the jobs created in the public sector come from the regional government, which is responsible for managing powers in education and healthcare. 

Indefinite and fixed 

Another major controversy surrounding the labour market in recent years is that of indefinite and permanent contracts. Looking at the figures now, the number of workers on permanent contracts has increased by 140% compared to pre-pandemic figures. However, their importance in the Spanish labour market remains secondary. In December last year, only 5.3% of workers registered with Social Security had an open-ended contract. However, this percentage has increased rapidly compared to 2.4% before the pandemic.

Labour reform

After the entry into force of the labour reform in 2022, the number of permanent contracts has increased sharply. Since February 2020, there have been 3.3 million more employees with a permanent contract, while the number of temporary contracts has fallen by 1.9 million. These moves have led to a significant increase in the number of employees with indefinite contracts. In December last year, 77.7% of employees had a permanent contract, 14.1% more than four years ago.

Also read: Andalucian Green Hydrogen Valley – new jobs and clean energy

You may also like