Drama in the workplace

One in every four working-age people in Spain is unemployed. The total is 5,778,100, according to the leading indicator of the Spanish labor market, the Active Population Survey (EPA), compiled by the National Statistics Institute (INE). Between July and September, unemployment rose by 85,000 people to reach an all-time high of 25.02 percent of the active population. In some regions the figure stands at over 35 percent. Nationwide, in 1.7 million families no member is in work.

Even though the figures were foreseeable, they are still worrying. They show an accelerating deterioration in living conditions for those Spaniards who are most vulnerable, and also demonstrate that any eventual benefits the labor reform may have are taking a long time to reveal themselves. As was predictable, in the short term layoffs have become easier to effect, as shown by the increase in labor adjustment plans (EREs). The intensity of the recession and the contraction in demand generated by a pro-cyclical fiscal policy have neutralized the possible incentives businesses might have had for maintaining their staffing levels. In fact, the erosion of business confidence and the continual worsening of credit conditions combine to put back plans for investment and for the strengthening of all forms of capital, human included.

Of what the EPA shows about the last three-month period, it is important to highlight the destruction of long-term contracts: 179,400 such posts have gone, the biggest-ever fall in this segment. Even the public sector has been hit. If the overall rate of unemployment did not rise yet further, this was due to the fall in the size of the active population and the increase in self-employed jobs. The impact of joblessness on the young is of particular concern: the danger of human decapitalization is so much more serious when it affects those who have future economic growth in their hands. This situation is hardly encouraging in the short term, either.

It is impossible to hope that these figures constitute a high water mark of the present crisis. It is highly probable, as has been signaled by the majority of institutions and analysts, that unemployment will continue to grow in the year to come because — despite what the government predicts — the economy is set to contract by no less than 1.5 percent.

These figures are surely sufficiently shocking for the promotion of stimulus measures, which should be Europe-wide, to become the priority policy being defended before the EU’s institutions. These must be the leading drivers of a recovery in confidence — the primordial condition in order to stop the bleeding of jobs and fertilize new ground for employment creation.