COVID-19 left 754,532 additional unemployed in Spain during 2020; the biggest increase since 2009

Registered unemployment rises in Spain for the first time in 2020 after seven consecutive years of decline

Total of people employed in Spain at the end of 2020: 19,048,433, a fall of 1.86% representing 360,105 less contributors to the Social Security system.

Total officially unemployed at the end of 2020: 3,888,137, a rise of 22.9% and 724,532 people
ERTE: 755,613 people on temporary redundancy schemes at the end of the year

The COVID-19 pandemic has broken seven consecutive years of employment growth, with a loss of 360,105 contributors to the Spanish Social Security system, leaving the total number of people employed at the end of 2020 at 19,048,433 people, 1.86% less than a year before and the first annual drop since 2013.

Figures released on the 5th January show that registered unemployment in the public employment services rose for the first time in 2020 after seven consecutive years of decline, with 754,532 more individuals registered as unemployed (the total of unemployed comprises those who were formerly working and contributing to the Social Security system as well as those who have not worked before, ie those who were previously studying, hence the higher figure), which brings the total of those officially registered with the state employment offices to 3,888,137 people, the 22% increase in the total of unemployed last year the largest increase since 2009 when the country was entering its last major recession.

During December 26,432 new employment contracts were issued, technically creating this number of new jobs, which is the smallest increase for the month of December in eight years (normally this is a good month for employment as retailers increase staff to cope with Xmas shopping and bars and restaurants are busy with end of year events and employ additional workers), but registered unemployment grew by 36,825 people, the first increase for this month since 2011 (many retailers took on less staff than normal and restaurants were unable to host their normal end of year celebrations due to covid restrictions, so needed less staff).

The services sector was the worst affected by the increase in unemployment this year, with 506,084 unemployed, an increase of 22.8% this year. The services sector was followed by the “group without previous employment”, with 92,872 more unemployed (+ 35.9%), and construction, which registered an increase of 44,133 unemployed (+ 16.1%) in 2020. Agriculture and industry added 41,178 and 40,265 more unemployed, with percentage increases compared to 2019 of 29.2% and 14.6%, respectively.
By age, unemployment among young people under 25 years of age shot up 47.1% in 2020, with 116,291 more unemployed than in 2019, while unemployment among people aged 25 and over increased by 608,241 unemployed (+20, 8%).

755,613 workers on the Temporary Employment Regulation File (ERTE temporary redundancy scheme)
The year 2020 has concluded with 755,613 workers registered with the Temporary Employment Regulation scheme (ERTE), the majority derived from the pandemic, an increase of 8,033 people during December.This scheme is being used by businesses unable to continue employing workers, but which cannot afford to make them redundant (or are unwilling to do so as there is a chance that the job can be saved once the economy starts to pick up if covid is defeated), a process which can cost many thousands of euros depending on the length of time an employee has worked for the business and their salary level. Many business owners would be forced into bankruptcy were they obliged to make staff redundant, hence the use of this scheme.

Technically, these people are not working so are not included in the figures of those employed, but are not unemployed, so are not included in the unemployment figures either. During the peak of the first lockdown in the early part of the pandemic, 3.4 million people were “furloughed” using the ERTE scheme, but since then the total has slowly been decreasing as employees are able to return to their place of work.