Number of unemployed falls 12% in 2016, an all-time record

BarcelonaUnemployment last year saw the greatest decrease since records began, in both Catalonia and Spain. Specifically, the number of people out of work in Catalonia dropped by more than 62,000, about 12%, to 453,645. In Spain as a whole, the reduction hit 400,000 almost (10%), leaving just above 3.7 million unemployed. Despite these records, unemployment continues to be the main worry of Spaniards, even increasing as such according to the Centre of Sociological Studies’ barometer published yesterday; it was the primary concern for 74.7% of those surveyed, 1.8% more than the previous month.

The fall in unemployment during the last year is the fourth consecutive annual decrease and the most pronounced of the historical series, which began in 1996. In the last four years, unemployment has reduced by more than 1.1 million people in Spain. What’s more, in 2016, it dropped for both sexes, although more among men at around 12% compared with a 7% decrease for women, leaving more than 2 million women out of work, as opposed to 1.6 million men.

All sectors of the economy saw a decrease, especially services and constructions, but also the most vulnerable groups, like the under-25s and the long-term unemployed.

“They’re good statistics” said José García Montalvo, professor of Economics at Pompeu Fabra University. More than the drop in unemployment, he highlighted the “restarting of job creation”. According to the statistics published yesterday, in Catalonia there are almost 3.2 million registered to pay social security, the highest number since 2005, including 119,185 sign ups during 2016, 4% up on 2015, the highest increase since 2008. In the whole country, at the end of 2016 there were 17.8 million people registered, 3% more than the previous year, the strongest growth since 2006 and the highest total since 2009.

But, despite the increase in the number of workers paying into the system, the social security deficit continues to grow. This year, the forecast is that social security, paid for by workers’ contributions and used to pay pensions, will end with a deficit of 18 billion euros, the highest in its history, and which will stay practically the same next year.

On this subject, García Montalvo believes various factors are at work, like the current low salaries, contribution limits and, above all, “the excess of exemptions and deductions, which do serious harm to the revenue”. In his opinion, the social security system needs large-scale reform to guarantee its sustainability.

The outlook for 2017 is a deceleration in the rate of job creation, basically because the macroeconomic predictions of the majority of organisations set the growth of the Spanish economy around 2.5%, below the 3.2% there was up to the third trimester of 2016. García Montalvo, however, suggests that the growth could be greater thanks to the economy’s strong inertia, which shows “a very powerful change of cycle”.

Job insecurity

The dark side of the statistics published yesterday is, once again, the high levels of short-term contracts and job insecurity, denounced by the main unions and acknowledged by the Catalan Minister for Work, Dolors Bassa. In Catalonia during 2016, close to 3 million contracts were formalised, of which 13% were indefinite and 87% temporary. In comparison with 2015, the number of contracts increased by 9.3%, with the greatest increase in the case of indefinite contracts (16%) compared to fixed-term (9%).

The secretary general of the UGT (General Workers’ Union of Catalonia), Camil Ros, was positive about the decrease in unemployment but qualified it as not being enough and he criticised the widespread lack of job security. For their part, a statement from CCOO (Workers Commissions) stressed that “despite the reduction, we are still at unsustainable levels of unemployment in comparison with the start of the financial crash”.

The employers’ organisation PIMEC (Small and Medium Businesses of Catalonia) were positive about the statistics, but asked the politicians responsible to not forget that policies to generate economic activity and reindustrialisation are still necessary, whilst Foment (Promotion of Work) joined the Spanish government in defending labour reform as a tool of job creation.