The Truth About Spain’s Labor Market: Disguised Inefficiencies and Government Interventions

That the Spanish labor market has problems is evident, since we are the worst country in the OECD in labor performance, with a record unemployment rate, above other countries even like Greece, where it has also traditionally been high. The Government, far from making the labor market more flexible, continues to intervene in it and also does so, from a statistical point of view, to disguise the imbalances and failures of the system. Not surprisingly, it puts a million unemployed each month under the rug of statistics.

This Thursday, after the Public Employment Services publish the unemployment data and the Ministry of Social Security does the same with the affiliation data, both the minister Yolanda Diaz like Minister Escrivá, they have come out proud to celebrate what they consider “historically good” data for the labor market. Some statements that we are getting used to hearing month after month, whether or not they are really historical. The truth is that the statistics allow for the optimistic headline, but it hides clear inefficiencies that show that Spanish job performance is far from optimal. These inefficiencies have been pointed out by the economist Daniel Lacalle on social networks, to the chagrin of Escrivá, who has not hesitated to publish a comment accusing the economist of intoxicating.

In this comment Escrivá accuses Lacalle directly of “soiling the extraordinary performance of the job with false information.” However, Lacalle has been comfortable highlighting all the black holes in government statistics. Namely: the reality of the contracts issued and their number of hours worked, or the unemployed who are looking for a job and who do not appear in the statistics:

The reality about permanent contracts:

The problems of field employees or the self-employed:

Or the lack of business dynamism with 70,000 fewer companies than before the pandemic:

Or the number of contracts for each new affiliate:

In short, a full-fledged review that calls into question the optimism of the Government. In this case, Both Escrivá and Yolanda Díaz have taken advantage of the good performance that Holy Week has had in April in the hospitality industry with a weather that has accompanied. But it cannot hide the inefficiencies of an extraordinarily intervened and inefficient labor market.