First flickers of the light at the end of the tunnel?
The financial downturn has gone on for so long now that it makes you want to just bury your head in the sand and wait for the whole thing to blow over: out of sight, out of mind. Few people in Spain, however, have been able to remain oblivious of this prolonged and severe crisis. It has been so devastating that everyone has been affected by it (obviously some to a greater extent than others), and taking the ostrich approach has been of little use. We have all seen and felt its impact, even if we would have preferred not to.
For nearly a year now, we have been hearing that we are back on the road to economic recovery. We are told that we are now reaping the benefits of the reforms implemented over these past few years. As far as the labor reform is concerned, we are told that unemployment is falling, that the number of workers registered with the Social Security system is on the increase, and that jobs are being created (see our post of March 21, 2014). Are these the first flickers of the light at the end of the tunnel?
Only time will tell for sure. We appear, for the time being, to have started 2015 off on the right foot. Early in January, the Ministry of Employment and Social Security announced that the year-on-year fall in unemployment recorded in December 2014 was the highest for any month of December since 1998, with a 5.39% decrease in the number of jobless registered with the Public Employment Service Offices. Another piece of news was the increase in hirings, with a cumulative figure for 2014 as a whole up 13.08% on the previous year. Of these hirings, in cumulative terms, open-ended full-time contracts increased by approximately 22% with respect to 2013, training and apprenticeship contracts grew by 32%, and work placement contracts grew by 30.2%.
And there appear to be more positive figures at the January close. According to the results of the most recent Labor Force Survey (EPA) published by the National Institute of Employment (INE) on January 22, 2015, the number of employed persons increased by 65,100 in the fourth quarter of 2014: this is the third quarterly increase in employment and the first increase in a fourth quarter since 2006. Finally, although unemployment increased this fourth quarter, the good news is that the unemployment figure is the best recorded for a fourth quarter since 2014 (with the exception of 2013), and that over the last twelve months, the unemployment rate has fallen by more than two points.
Yet although we are beginning to see positive developments which improve the picture to some extent, it cannot be denied that the situation remains shockingly bad: despite the aforementioned fall of two percentage points in the fourth quarter of 2014, we have an unemployment rate of 23.70%. It is for this reason that measures to improve employment are one of the main areas of focus of the legislative agenda for the next six months, which was approved by the Council of Ministers on January 9, 2015. It has been announced that these measures will be linked to reforms in training, self-employment, and improvements in the functioning of the employment services.
In short, 2015 looks set to be another entertaining year from the legislative perspective, and we very much hope to be dazzled, at long last, by the light at the end of the tunnel.
Garrigues Labor Department
