Spain lockdown destroys over 1 million jobs in Q2 2020

Agence France-Presse

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Spain lockdown destroys over 1 million jobs in Q2 2020

People walk on Las Ramblas street in Barcelona on July 25, 2020. - The Catalan government ordered the closure of all nightclubs, discos and event halls across this region of northeastern Spain following a surge in cases of coronavirus. (Photo by Pau BARRENA / AFP)


(UPDATED) 'The worst moment for the labor market took place at the end of April,' says Spanish Economy Minister Nadia Calvino

The coronavirus pandemic destroyed the jobs of over a million Spaniards during the 2nd quarter, mainly in tourism, data showed on Tuesday, July 28, but the government said the “worst moment” for the labor market had passed.

The National Statistics Institute (INE) reported that the number of unemployed rose by only 55,000 between April and June to 3.4 million.

That pushed the unemployment rate in the eurozone’s 4th largest economy to 15.3% from 14.4% in the 1st quarter.

But those figures significantly underestimate the impact of the virus on the Spanish job market which registered a 1.07-million drop in the number of people employed during the 2nd quarter, the INE said.

The unemployment data is based on surveys, not claims for benefits, and the survey counts only people actively seeking a job as unemployed. As the lockdowns imposed to stop the spread of coronavirus kept people from hunting for jobs, they were not considered as unemployed by the survey.

It also does not take into account the millions of workers on the government furlough scheme that was put in place to avoid massive layoffs at firms hit by the lockdown. 

“The figure is horrible, without a doubt the worst in history,” Pepe Alvarez, the leader of the UGT union, Spain’s 2nd biggest, told radio Cadena Ser.

In the 2nd quarter, the number of hours worked experienced “an unprecedented fall” of nearly 23%, the INE said. 

‘Slow recovery’

Although all sectors of the economy were hit, the damage was particularly acute in the services sector where nearly 817,000 jobs were lost. 

This includes the shops and restaurants that were closed for most of the lockdown as well as the tourism sector, a pilar of the Spanish economy which accounts for 12% of gross domestic product.

Construction and industry lost more than 100,000 jobs, while the impact on the agricultural sector was less, with 21,400 jobs lost. 

“Up until now we thought the pandemic would ease and we could set in motion an economic recovery, and that is becoming more difficult each day,” Alvarez added.

Spain has been one of the worst-hit countries in Europe, with the virus claiming more than 28,400 lives and infecting more than 280,000 people.

A recent spike in infections prompted Britain on Saturday, July 25, to impose a quarantine on all travelers coming back from Spain, dealing a major blow to the Spanish tourism industry.

British tourists are the largest national group of visitors, with 18 million of them taking a Spanish holiday in 2019.

And on Tuesday, Germany’s foreign ministry advised against travel to parts of Spain, including popular tourist destination Catalonia.

The latest unemployment figures “confirm that the recovery in jobs and the economy will be slow,” Javier Blasco, the director of the Adecco Group Institute, part of temporary staffing firm Adecco Group, said in a statement.

‘Worst moment’

Economy Minister Nadia Calvino said Tuesday’s figures “reflect what happened in the past,” adding that more recent economic indicators “confirm the tendency of an economic recovery.”

“The worst moment for the labor market took place at the end of April,” she added.

The crisis has undermined the already fragile recovery of Spain’s labor market which in 2013 registered an unemployment rate of 27%.

Since then, the situation has improved, with the rate dropping to 13.8% at the end of 2019, its best figure in years – although it remains the 2nd highest figure in the eurozone after Greece. 

The International Monetary Fund estimates unemployment in Spain could soar to 20.8% in 2020, while the government expects a figure of 19%. – Rappler.com

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