Randstad Research Analysis: The Year 2020 Leaves 623,000 Less Employees and 528,000 More Unemployed, While Public Sector Achieves Record Employment Figures
The Fourth Quarter 2020 Labor Force Survey (LFS) reflects a partial recovery in the impact of the COVID-19 crisis on the Spanish labor market. There was an increase in employment during the quarter, while unemployment also declined slightly. The labor force has grown very similar to that of the labor force, of 164,300 people. Employment increased by 167,400 people in the fourth quarter, the best fourth quarter since 2004, although that number must be qualified by the rebound that ERTE people have experienced in the last two months of last year. The number of people employed stood at 19.34 million people. Unemployment fell by 3,100 people to 3.72 million, while the inactive population fell by 124,600 people. The unemployment rate fell by a tenth to 16.13%.
The strong employment performance in the fourth quarter still reflects part of the “rebound” effect of the economy after the worst quarter in LFS history, which was the second quarter of 2020. The number of employed people was 19 34 million people, after measuring a quarterly increase of 167,400 people employed. In inter-annual terms, the loss of employment continued to moderate, even if it still reflects a decrease of 3.12% (-622,600 employees).
Regarding the development of the activity, the increase of 164,300 assets continues to partially offset the decrease of 1.02 million assets in the second quarter. The participation rate recovered 0.36 percentage point and rose to 58.19%. In year-to-year terms, the working population fell by 0.41%.
The quarterly increase in employment, especially part-time and temporary, unlike the year as a whole
The increase in employment in the fourth quarter (+167,400 employees) was found both among employees (+133,500 employees, + 0.83%) and among the self-employed (+28,900, + 0.94%) . Among the self-employed, the number of employers decreased on a quarterly basis (-32,100, -3.59%), while the number of self-employed without dependent workers increased. In inter-annual terms, the number of employers has decreased (-10.14%) and that of the rest of the self-employed has increased.
Among employees, the fourth quarter of the year was characterized by a much more intense increase in holders of a temporary contract (+107,200, + 2.75%) compared to those of a CDI (+26,300, + 0.22%), but year on year, the evolution of salaried employment reflects declines in both cases, but much more pronounced in the case of temporary employees (-397,100, -9.03%) than in that of salaried employees permanent (- 207,500, -1.67%). This annual behavior, already observed during the three previous quarters, reflects an asymmetric impact of the loss of employment between permanent and temporary following the Covid-19 crisis. The rate of temporary employment increases by four tenths compared to the previous quarter and stands at 24.6%, which indicates that more than 3 in 4 employees in Spain have a permanent contract.
The recovery in employment in the fourth quarter was again stronger in the public sector (+ 1.26%) than in the private sector (+ 0.79%). In inter-annual terms, while public employment continues to grow (+ 3.87%), employment in the private sector has fallen sharply, with a drop of 4.48%. Employees in the private sector represent 15.97 million people and those in the public sector 3.34 million, the highest value in the historical series.
Employment increased in the fourth quarter among those over 25, as among the youngest, a loss of 62,600 employed people was measured. The largest increase occurred in the 25-29 segment (+65,800 employed people) and the largest percentage increase (+ 4.21%) was also concentrated in this segment.
By sector, in the fourth quarter, employment increased in all sectors without exception. The largest increase was measured in the service sector (+79,600), followed by agriculture (+51,000), construction (+ 30,900) and industry (+ 5,900). In year-to-year terms, employment fell in all sectors, with a lower intensity in the case of construction (-0.29%) and higher in services (-3.55%), with an average each of 3.12%.
The increase in employment in the fourth quarter occurred in 10 of the 17 Autonomous Communities and in Ceuta and Melilla. The largest increases were recorded in Andalusia (+97,800) and Madrid (+62,100), although the most intense increase in percentage terms was recorded in La Rioja (+ 3.32%). In year-to-year terms, employment is declining in all communities except Extremadura, Murcia and La Rioja.
Unemployment rate drops to 16.13%, with seasonally adjusted unemployment down 1.56%
Unemployment as measured by the APE fell by 3,100 people in the fourth quarter of the year and the unemployment rate fell to 16.13%, which is far from reflecting the extent of the labor market crisis. The INE explains that the requirements of the ILO to consider a person to be unemployed are difficult to meet in a context of business closure and cessation of activity. For this reason, a significant proportion of people who have lost their jobs are still considered inactive.
The quarterly decline in unemployment occurred among those under 25 (-50,000 unemployed), while it increased by 46,900 among those over 25. In seasonally adjusted terms, unemployment fell 1.56%.
Randstad Research analysis: year 2020 leaves 623 thousand fewer employees and 528 thousand more unemployed, while public sector reaches record employment figures
Once the fourth quarter EPA data is known, it is now possible to take stock of the impact of the COVID-19 crisis on the labor market in 2020, according to this statistical source. And the balance, as one would expect, is very negative. Over the year as a whole, 622,600 jobs were lost, equivalent to a drop of 3.12%. This is not the highest percentage in history in a year, since the worst data was measured in 2009, with a decline in employment of 6.6%, but this time the quantitative importance of the mechanism of the ERTE, which at the end of 2020 employed 755 thousand people, counted as employees according to the EPA and affiliated according to social security.
The job loss has been concentrated exclusively in the private sector, which has seen the number of people employed drop in 2020 by 748,400 in total (in addition to being where the vast majority of ERTE workers are concentrated) , while the public sector employment experienced a year of growth, with 125,800 more people, reaching an all-time high for civil servants: 3,379,100 people.
Regarding unemployment, the APE reflects an increase in 2020 of 527,900 unemployed, the effect of the crisis has not yet been fully grasped, as the normalization of the atypical increase in the inactive in the second quarter is not not yet completed, which can be seen as an indication of the fact that at the end of the year the number of unemployed measured by the EPA was nearly 200,000 people lower than the unemployment records of the public offices of the employment while the LFS reflects an increase of 303 thousand inactive compared to 2019.