Spain’s jobless rate drops due to tourism recovery and less temp work

Spain's unemployment rate fell in the second quarter of 2022, data showed on Thursday, helped by a recovery in the tourism sector and reforms aimed at cutting the use of temporary contracts.

Spain's jobless rate drops due to tourism recovery and less temp work
The number of job seekers in Spain fell below three million in May for the first time in 15 years.(Photo by LLUIS GENE / AFP)

Unemployment edged down to 12.48 percent in the second quarter from 13.65 percent in the previous three-month period, national statistics institute INE said in a statement.

The number of unemployed people fell by 255,000 in the second quarter to a total of 2.92 million, with the services sector leading job creation, it added.

Hotels, restaurants and bars have taken on more workers as Spain’s key tourism sectors continue to rebound following the end of most pandemic travel restrictions.

The improvement in the jobless rate has also been driven by a labour market reform which came into effect on January 1st and limits the back-to-back use of temporary contracts and makes permanent contracts the rule rather than the exception.

However, there are voices from within some of Spain’s trade unions and the PP opposition party that say that the new system is “perverting the figures” and “dressing up the reality”, as although many of these contracts are labelled as permanent, employees only work during certain months of the year.

READ ALSO: Spain’s labour market buoyed by sharp drop in temporary contracts

The number of job seekers in Spain fell below three million in May for the first time in 15 years.

Economy Minister Nadia Calviño said Tuesday that the improvement in Spain’s labour market is “one of the motors” of the country’s economic growth.

She predicted Spain’s jobless rate would drop to 12.8 percent at the end of the year and to 12.0 percent in 2023.

At the same time, Calviño slashed Spain’s growth forecast due to the fallout of Russia’s invasion of Ukraine and higher interest rates.

Among western economies, Spain was one of the worst-hit by the economic fallout of the pandemic, with its gross domestic product collapsing by 10.8 percent in 2020, largely due to its heavy dependence on tourism.

Some half-a-million people lost their jobs in 2020 in Spain, which has one of the highest rates of unemployment in the OECD (Organisation for Economic Co-operation and Development).

READ ALSO: The downsides of moving to Spain for work

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Workers in Spain earn 20 percent less than EU average

Despite being one of the largest economies in Europe, Spain may not be a good place to work for those looking to be well compensated as figures reveal workers earn a lot less than some of their European neighbours.

Workers in Spain earn 20 percent less than EU average

People working in Spain earn, on average, €1,751 per month. This is 20 percent less or €443 less than the EU average of €2,194, according to human resource giant Adecco and their monitor on wages, published Tuesday.

Life in Spain is getting more and more expensive due to soaring inflation and rising energy costs, but despite having the highest average salary in history, people in Spain can’t afford as much as they did 13 years ago, due to diminishing purchasing power.

Within the EU, Adecco reported that 15 countries have wages lower than Spain, and 11 have higher. 

Nine European countries have average salaries above €2,500 per month, while in Spain the average salary does not even reach €2,000. This is the case in Finland (€2,603), Sweden (€2,623), Austria (€2,788), Belgium (€2,830), the Netherlands (€2,883), Ireland (€2,920), Germany (€3,003), Denmark (€3,458 ) and Luxembourg (€3,502).

In Germany for example, employees earn on average 42 percent more than in Spain, meaning that workers in Spain would have to work 20 months, almost two years, to be able to earn the same as a German.

There is more than €1,250 difference between what those in Germany are paid and what those in Spain are paid.

On the other hand, there are several EU countries with salaries less than in Spain. Those with average salaries of €1,100 are mostly found in Eastern Europe, with Bulgaria being the EU country with the lowest remuneration of just €562 per month.

This is followed by Romania (€718), Hungary (€798), Poland (€833), Croatia (€863), Latvia (€892), Slovakia (€977), Lithuania (€1,007), Greece (€1,034), Estonia (€1,053) and the Czech Republic (€1,078).

Spain forms part of the middle group that earn more than €1,100 per month but less than €2,500 per month. Those EU countries with salaries similar to Spain include Portugal (€1,106), Cyprus (€1,309), Malta (€1,329), Slovenia (€1,417), Italy (€2,074) and France (€2,446). However, there are of course wide gaps between these countries too.  

Compared to its nearest neighbours, Spanish workers earn 58 percent more than those in Portugal or €645 more per month, but 28.4 percent less than those in France or €695 less each month.