Spanish labour market still characterised by temporariness and uncertainty

by Lorraine Williamson
Spanish labour market

MADRID – The Spanish newspaper El País calls it the paradox of August 31: A historic drop in unemployment in August is accompanied by many job losses. The Spanish labour market is slowly recovering but is still characterised by temporariness and uncertainty. 

Earlier this week, the Ministry of Employment released the figures for August. Minister Yolanda Díaz welcomed the extreme drop in unemployment in August. Nevertheless, the Spanish Social Security (Seguridad Social) lost 118,004 paying members in August. On August 31 itself, according to official figures, no fewer than 294,808 jobs were lost in Spain, the highest number since the pandemic started. Only in August 2018, more jobs were lost with 304,632. The reason for this is that many temporary contracts in the tourism sector expire on 31 August. 

Spanish labour market uncertain and temporary 

However, a large part of these terminated contracts are immediately resumed as of the first of the following month, so that the statistics can only speak of a moment when so many jobs have been destroyed. In reality, people go back to work the next day on a new temporary contract. In this respect, the labour market in Spain is more than ever characterised by temporariness and uncertainty. Because employees are never sure whether their contract will be extended again after a month. 

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Labour market recovery visible but very fragile 

In any case, the net balance (the number of terminations of employment contracts minus the number of registrations) has not been this high since 2018. El País wrote on Thursday that the recovery of the labour market in Spain is visible because more new contracts were signed this August than, in August 2020. 

Most contracts in Spain of a temporary nature 

Nevertheless, uncertainty continues to dominate the Spanish labour market, due to these temporary contracts. Of the 1,407,563 contracts concluded last month, 1,283,266 (91%) are of a temporary nature. Data from the employment agency SEPE shows that the average contract duration for contracts concluded last July was 53.19 days. 

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