Virus-hit Spain’s jobless rate jumps to 14.4%

Agence France-Presse
Virus-hit Spain’s jobless rate jumps to 14.4%
The rise in joblessness in Spain for the 1st quarter of 2020 is concentrated in the services sector and among workers with temporary contracts

MADRID, Spain – Spain’s unemployment rate jumped in the 1st quarter to 14.4%, figures from national statistics institute INE showed on Tuesday, April 28, as a nationwide coronavirus lockdown hit the eurozone’s 4th largest economy.

The jobless rate was up from 13.8% in the previous quarter, its lowest level since the 3rd quarter of 2008 but still the highest rate in the eurozone after Greece.

“This rise reflects the effect of COVID-19,” secretary of state for the economy, Ana de la Cueva, told a news conference, adding the rise in joblessness was concentrated in the services sector and among workers with temporary contracts.

Spain, one of the hardest-hit nations by the coronavirus pandemic, imposed a nationwide lockdown on March 14 which has largely paralyzed its economy.

Many companies have faced difficulties to conduct business or have been forced to close temporarily, with hotels and the restaurant sector hit especially hard in the world’s 2nd most visited country after France.

The number of jobless rose by 121,000 people to hit 3.31 million at the end of March, according to the statistics office. 

But the figure may actually be higher since INE said many workers who lost their jobs were classified as “inactive” because the survey carried out to determine the jobless rate was disrupted by the lockdown.

The jobless rate also does not include the roughly 3.9 million workers who the government says have been temporarily laid off from their jobs.

Spain’s leftist government has simplified rules for temporary layoffs, under which companies facing financial difficulties can temporarily suspend a worker’s contract, while at the same time it had banned permanent dismissals during the pandemic to try to soften the blow to the economy from the COVID-19 outbreak.

Spanish airline Iberia, fast-food retailer Burger King, and automaker Seat are among the large companies that have temporarily laid off thousands of staff.

The latest jobless figures “do not reflect, by far, the employment situation today in our country” which is “absolutely dramatic,” Pepe Alvarez, the leader of the UGT union, Spain’s 2nd biggest union, told radio Onda Cero.

Tourism slump

March is usually a good month for job creation in Spain because it marks the start of the tourism season, with many people finding temporary jobs in the hospitality sector.

But the tourism sector, which accounts for around 12% of Spain’s economic output, has been hammered by the pandemic since governments imposed travel restrictions and airlines grounded scores of flights.

The Spanish government on March 19 ordered all hotels in the country to close as part of its efforts to curb the pandemic.

The International Monetary Fund predicts the country’s jobless rate will hit 20.8% this year while the Bank of Spain sees it rising to between 18.3% and 21.7% depending on how long the lockdown lasts.

Parliament last week approved extending the lockdown until May 9 and Prime Minister Pedro Sanchez has said Spain could hopefully begin to ease its restrictions in the 2nd half of May, but has warned that “deescalation will be slow.”

Spain’s unemployment rate soared in 2008 after a decade-long property bubble burst, throwing millions of people out of work.

The rate has been steadily falling since hitting a peak of 27.2% in early 2013. – Rappler.com