Spanish Unemployment Drops at Highest Rate in 20 Years

Spanish Unemployment Drops at Highest Rate in 20 Years

Even though two-thirds of the jobs that were created in June were temporary positions, more and more open-ended jobs are being created.

Spanish unemployment is slowly turning a corner

Spain always sees a boom in jobs during the summer and this boom was bigger than ever with data showing the country welcomed 84,000 new employees to social security in June; representing the biggest single fall in unemployment the country has seen since 1997.

The Employment Ministry confirmed that 83,993 people registered with the state employment offices at the beginning of July. The current official unemployment figures now stand at 3.68 million in Spain.

Going on a month-by-month basis July saw 84,721 more people added to the payroll than in June. When you compare it to figures from last year there are 3% more people working this July than last July. Spain currently has 17.8 million people contributing to social security.

Many of these new jobs (around 51,000) were created in the hotel and catering sectors. This is confirmation of the trend that the reason Spain’s economy does so well during summer is because of the long summer tourism season. While many of these jobs are often temporary current trends suggest that many of these “summer jobs” could last longer and some may even become permanent positions.

Spanish daily El País are reporting that 7.6% of the new contracts signed in July, which is about 1.81 million, were open-ended. This means that the positions the contracts are for could last longer than the summer season. This might sound like a small figure but it is representative of a growing confidence in the hospitality sector; a confidence reinforced by the record number of tourists, higher spending per head, and the recovering economies of both Spain and Europe as a whole.

Marcel Jensen, an economy professor with the Autónoma University of Madrid said that the figures show how strongly the Spanish economy is doing right now and the cost of living in Spain is being kept low. More people are being employed each quarter. Marcel did warn that reforms would be needed to maintain this success in the long term though.

Such reforms, which have been introduced in the past few years to liberalise the employment sector of Spain, appear to have done a good job of boosting employment. Even so analysts and financial experts believe that the growth Spain has seen for the past two years will slow down within the next two years.