Spain's Employment Soars To Historic Highs In The First Eight Months Of 2023
Spain News
Published: 06 September 2023 13:28 CET
Spain is celebrating a remarkable resurgence in its labour market as it reports record-breaking employment figures for the January to August period of 2023.
The Spanish government's latest release indicates that the country has witnessed its most robust job creation spree, eclipsing even the post-pandemic recovery in 2021. The news release highlights the extraordinary achievements in the labour sector, showcasing not only the quantity but also the quality of jobs created.
In a significant milestone, the number of contributors to the National Insurance system grew by an impressive 482,096 people in the first eight months of the year, culminating in a total of 20,722,990 workers by the end of August when seasonal fluctuations and calendar effects are taken into account. Moreover, August alone saw a seasonally adjusted increase of 17,745 in Social Security affiliation. This marks a resounding accomplishment, especially when compared to the entire year of 2022.
The astounding growth in employment is even more pronounced when compared to the pre-pandemic level of February 2020, with over 1.3 million jobs being created during this period. Two-thirds of these new jobs have been generated in the private sector, underlining the resilience and vitality of Spain's economy.
A standout feature of Spain's recent labour resurgence is the prominence of high-value sectors such as Information Technology, Telecommunications, and Professional, Scientific, and Technical Activities. Employment in these industries has surged by 23.9 percent and 14.4 percent, respectively, compared to pre-pandemic levels. Approximately one in four new contributors, equivalent to almost 291,000 individuals, have joined these highly productive sectors, solidifying Spain's position as a hub for innovation and technology.
Another remarkable aspect of Spain's labour market rebound is the positive impact on female and youth employment. Female employment has experienced an 8.6 percent increase, outpacing male employment growth by 3 percentage points. Youth employment, on the other hand, has surged by 10.4 percent, significantly higher than the average growth rate, which is 3.4 percentage points above the average. Looking back to December 2021, before the labour reform, the increase in employment among young people stands at an impressive 12.7 percent, nearly three times the average for all age groups.
The positive outcomes of the labour reform implemented twenty months ago are evident in the improved job quality and stability. The percentage of temporary contract workers has drastically reduced to 15 percent, almost half of what it was before the reform, which stood at 29 percent. For individuals under the age of 30, the reduction in the temporary employment rate is even more significant, dropping by 28 points from 53 percent to 25 percent compared to the pre-reform era.
This reduction in temporary employment is seen across all sectors, with historically high temporary employment rates in sectors like Construction and Hotels and Catering witnessing significant drops of 29.7 percent and 22.6 percent, respectively.
A striking statistic is that there are now 2.8 million more contributors on permanent contracts compared to December 2021, the month just before the labour reform was enforced. The average length of contracts that have been terminated has also increased by 34 percent, reaching 257 days, a substantial improvement from the 2022 figures.
Spain's social security system is reaping the rewards of this employment renaissance, with revenues from social security contributions growing by 10.2 percent up to July. Even after discounting the revenue effect of the Intergenerational Equity Mechanism (IEM), which started in January 2023, contributions are still growing at a remarkable rate of 8.4 percent. The improved employment situation has led to a decade-high ratio of contributors to pensioners at 2.39, further strengthening the sustainability of the pension system.
In summary, Spain's labour market is experiencing an unprecedented resurgence, not only in terms of job quantity but also in the quality and stability of employment. The nation's unwavering commitment to fostering innovation, supporting female and youth employment, and implementing labour reforms has yielded extraordinary results, propelling Spain to new heights in its economic recovery.
Sources
https://www.lamoncloa.gob.es/lang/en/gobierno/news/Paginas/2023/20230904_insurance-contributors.aspx
