"The highest job creation since 2005. The lowest unemployment rate since 2008. Female employment growing above that of men. Youth unemployment below pre-pandemic levels. The EPA confirms again that the fair recovery is advancing in Spain. We continue". With this tweet, Pedro Sánchez took out his chest this Thursday of the positive evolution of the national labor market. The 2021 'photo finish' presented by the National Institute of Statistics (INE) is, a priori, good, but the President of the Government forgets in his assessment numerous groups that continue to suffer the consequences of the economic crisis caused by the Covid .
The performance of the labor market is measured by the monthly affiliation and unemployment statistics published by the Ministries of Labor and Social Security and by the INE's quarterly Active Population Survey. This Thursday, the record numbers of unemployment reduction and job creation grabbed the headlines, but a more exhaustive analysis of the microdata yields conclusions that are, to say the least, worrying. This is what the analysts and experts consulted by La Información warn, seasoned in the assessment of this type of less 'titable' variables of the labor market. They are the guts of the EPA and they come to dismantle the government's triumphalism regarding recovery. The "spectacular" and "extraordinary" data, in the words of the economic vice president, Nadia Calviño, or the "success" that the Minister of Labor, Yolanda Díaz, presumes, hide many shadows that deserve attention.
"The drop in hours worked is dramatic," starts the economist Javier Santacruz. He gives himself the paradox that more people work, but they do fewer hours. With data: in 2021, 840,700 jobs were created, 153,900 of them in the fourth quarter, but the hours worked in the final stretch of the year were still 3.8% lower than those registered in the fourth quarter of 2019, before the outbreak of the pandemic. Doctor of Economics Juan F. Jimeno points to this as one of the "gray points" of the EPA, which would be related to the persistence of employment regulation mechanisms in companies in sectors that continue to be affected by restrictions, especially those related to with tourist, restaurant and leisure activities... but also with the industry dependent on semiconductors.
It must be remembered that those affected by temporary employment regulation files (ERTE) do not count in the statistics as unemployed, but as employed, and in many cases they work with reduced hours, without having their employment completely suspended. According to the INE, which includes in this group those employed who have not worked in the reference week, bringing together those who are immersed in regulation and employment processes and those whose companies are partially unemployed for technical or economic reasons, 63,800 people were in this situation in the fourth quarter of 2021. According to Social Security records, at the end of December there were more than 100,000 people in ERTE.
Another of the gray points pointed out by Jimeno is the strong increase in the inactive population. Here the INE counts all those who are neither employed nor considered unemployed because they are no longer (or at the moment) looking for a job (students, retirees and other types of pensioners, people who perform unpaid social work or unable to work). According to the EPA, the number of inactive people increased by 216,600 in the fourth quarter of 2021. It has not grown as much since the second quarter of 2020, when it shot up by more than one million people as a result of the pandemic. In total, at the end of last year there were 16,418,200 inactive people. This, added to the decrease in the active population, due to the brake on the entry of immigration and the expulsions from the labor market caused by the pandemic, is a serious problem for economists, because it can end up causing labor shortages.
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José Ignacio Conde-Ruiz (Fedea) delves into the drop in the active population and focuses on a revealing phenomenon: he focuses on the younger population, since the active population has increased among those over 44 years of age. "It is mainly concentrated among young people between 20 and 25 years old, where more than 120,000 have stopped participating in the labor market," he points out. For this economist, what is desirable is that this reduction in the youth workforce is due to studies and is not caused by discouragement or emigration. The underlying reason would be in the first option, according to what is extracted from the EPA microdata, although, in general terms, there would be other keys that would explain the increase in the inactive population, such as the transfer of all those who have not been able to cut their working hours, according to the analysis provided by Santacruz to this section. "It is early to know the cause," Jimeno concludes.
900,000 'ghost unemployed'
There are more shadows at the bottom of the Survey. Another of the least analyzed variables, and yet the most revealing, is that of the group of people who are not looking for a job, despite being available to work. In the fourth quarter of 2021 there were 902,400 people in this situation. And beware: for statistical purposes they do not count as unemployed, because they do not meet all the conditions that the ILO definition requires to be classified as such. According to the INE's criteria, adjusted to that of the European agency Eurostat, they fit within the definition of people who "are available to work and wish to do so but neither seek nor have found a job that they are going to join." This group reached more than 1.6 million people in the second quarter of 2020, in full confinement, when it was impossible to go out to look for a job.
Each quarter, the Fedea researcher Florentino Felgueroso carries out the exercise of calculating the Spanish unemployment rate based on the American model and the result is, to say the least, striking. According to his calculations, if the discouraged, those who do not seek employment but want to work, those employed in ERTE and involuntary part-time employees (what is considered "underemployment") are added to the total number of unemployed, the result is a rate of unemployment of 22% of the active population, taking into account in the denominator the group of those considered "potential assets". According to these calculations, in Spain there would be hundreds of thousands of ghost unemployed, who do not appear in the statistics as such because, in many cases, they are in situations of underemployment and in others, directly, they do not meet the criteria defined by national and international organizations. to be considered as such.
More common but equally striking data are those related to the recovery of public vs. private employment. While employment in the private sector has increased by 744,300 workers in the last 12 months, in the public sector the growth has been 96,400 people. However, in the private sector employment is still 232,300 people below the average levels of 2019 (-1.4%) and in the public sector there are 226,600 more than two years ago (+7%). This evolution worries the CEOE, which points out in its EPA analysis that "in the economy as a whole, there are still 5,700 fewer employed people than before Covid" and that the drop in the unemployment rate to 13.3% It is precisely due to the decline in the active population, which, if prolonged, "would mean a decrease in the potential growth of the economy," warn the employer's technicians.
There is still an important string of data that tarnishes an EPA that has been sold as historical. There are more than three million unemployed (3,103,800); the temporary rate stands at 25.4% and scales above 30% in the public sector; more than one million households (1,023,900) have all their members unemployed and in 563,700 families they do not have any income recipient; the youth unemployment rate is 38%, still above pre-pandemic levels; in Spain there are 912,500 ninis (young people who neither study nor work); Covid continues to wreak havoc on the working population and on the Social Security coffers, with 812,400 absences due to illness in the fourth quarter of 2021, when Ómicron burst in... In short, the 'guts' of an apparently optimistic statistic in a At first glance they actually leave little reason for triumphalism.