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Date Published: 03/06/2020

ARCHIVED - Record rise in Spanish unemployment during May

ARCHIVED ARTICLE

Unemployment now stands at 3,857,776, excluding all those on temporary redundancy notices

<span style='color:#780948'>ARCHIVED</span> - Record rise in Spanish unemployment during May

The effects of the Covid crisis are inescapable, and as predicted, the latest unemployment figures present a worrying picture for the economy during the next few months, the rise in unemployment during May the largest rise ever recorded for this month.

The number of unemployed registered with the state offices of the public employment services of Spain rose by 26,573 during May (+ 0.69%), the largest rise ever recorded for the month of May, according to data published by the Ministry of Labour and Social Economy on Tuesday.

This was caused by the Covid crisis and although the rise is substantial is ten times less than the rise registered in April and eleven times lower than that of March (March 282,891 and April 302,265).

The total number without work in Spain reached 3,857,776 unemployed at the end of May, the highest May figure on record since May 2016 when the country was still immersed in a major economic crisis and the increase of 26,573 exceeds the previous worst increase on record by more than 11,000; the highest previous figure was in May 2008 when in at the start of the economic crisis unemployment rose by 15,000.

The unemployment data for May does not include workers who are suspended from work or working reduced hours as a result of an ERTE temporary redundancy application, since the definition of “registered as unemployed” does not include temporary redundancies.

In seasonally adjusted terms, unemployment rose in May by 122,458, while in the last year unemployment accumulated an increase of 778,285 people, which is 25.3% more.

Nearly 6 million people will receive unemployment benefits on Thursday

As a result, nearly 6 million people will receive unemployment benefits on Thursday, another unwelcome record for the unemployment service, which will also break another record, leaving the largest hole ever in state finances.

The Public State Employment Service (SEPE) will be paying out 5,988,572€ in benefits, exceeding the April payment by some 600 million euros.

Although there are more than 2 million long-term unemployed in Spain, the figures are being distorted by the high number of people receiving money in order to “protect” employment, ie the ERTE temporary redundancy scheme which enables companies to temporarily shed workers while their businesses are forcibly closed or only allowed to operate in a reduced fashion.

The number returning to work boosts social security contributions

The number of people employed and paying Social Security contributions at the end of May was 18,584,176, a “rise” of 187,814. However, it is difficult to view this figure in too positive a light given that there are now 760,082 less contributors to the social security system now than before the crisis began.