The Spanish labour market marks the path of the crisis

Data on the labour market in Spain, one of the countries most affected by the coronavirus and where very specific measures have been taken to mitigate its economic and employment consequences, were awaited with interest. The test bed of a coalition government, which the country has never had before, is looked at with a magnifying glass by partners such as Italy and Portugal in particular, which also house executives with various political formations and also of a progressive nature. Well, the figures we know today show that not everything is reflected, they allow us to assess only an initial impact of the economic downturn and they are misleading. In Spain, registered unemployment doesn't measure the labour market as it does in the rest of the European countries, through the quarterly Labour Force Surveys. The increase of 302,000 new registered unemployed, apart from recording only the initial two weeks of this terrible tsunami, doesn't include all the unemployed that have actually occurred, for very different reasons. 

The sectors that have been hit hardest are the hospitality industry, construction and commerce, because they have the majority of temporary jobs. They are the ones that take the worst part in the paralysis of the activity, in a month like March that should in normal conditions have already registered very succulent rises due to the arrival of spring and the Easter. Other sectors such as the automotive industry have noticed less the marinade because the bulk of the manufacturers' workforce is made up of stable and permanent employees. Something that in other European countries such as Germany or France is well known. The worst thing about the data released today in Spain, the worst for the EU because it anticipates what may happen in the rest of the members, is that 834,000 jobs have been destroyed in just two weeks of March, and this is a reliable thermometer that will more than double in the next data released in April. 

The strategy of the government of Pedro Sánchez and Pablo Iglesias has been successful in the first instance in this virus-shaped hurricane: they have managed to avoid a horrible drain of unemployment, despite the fact that the three hundred thousand in a single month is unprecedented in the measurement of national unemployment. This strategy has prevented millions of people from joining the INEM lists thanks to the reinforced mechanism of the Temporary Employment Regulation Files. The ERTE has managed to contain the figures: one and a half million people have taken advantage of this formula, which is still uncertain in the long term, and which the government has been holding on to. They don't count as unemployed because they continue to contribute. But they are more than three million workers who do feel unemployed, and who don't know for sure if when activity recovers they will be able to return to the same job they left in the third week of March 2020, and under the same conditions.

Furthermore, the majority of the ERTE's declared in the last two weeks haven't yet been dealt with due to the collapse of the administrative services. For the moment, the only thing that is clear to those who are in one of these temporary files is that they will be able to get paid sooner or later, even if their company is closed, and that efforts are being made to finance this type of temporary exits of temporary suspension of activity. The European Commission's proposal to provide reinsurance to finance the ERTE, initially with an amount of 100,000 million euros, is aimed at guaranteeing income for employees who have lost their jobs. 

All the Ministries of Employment of the EU are today looking at the data offered by Spain on this second working day of April, to know the approximate scope of the decisions that PSOE and United Nations Podemos have taken to avoid the collapse of the country. The economy is already collapsed, but their efforts, stormy and surrounded by controversy, have tried to prevent the collapse of the citizens. None of these countries believes that the Spanish economy will come out of this brutal crisis with a V-shaped graph, where the objectives of recovering the activity and the tourism coincide with the arrival of the summer. Hundreds of thousands of European tourists are not going to come to Spain in July and August as if nothing had happened, the authorities of this country should discount this forecast and start working with an unprecedented recession for at least a year.