Spain's unemployment hits record low, but debate flares

Unemployment drops to century lows: The fine print behind the record

An engineer living with his parents, riding a scooter, and sharing a Netflix account. A young man without formal education who once owned a BMW and a €600,000 house working in construction. This comparison, launched on an economics forum, sums up the paradox surrounding the latest employment data: the three best unemployment figures of the century, according to their defenders, coincide with a persistent sense of precariousness. The numbers are down. Job quality, many argue, is not.

The trigger is the latest Social Security registration data, presented as historic. For some, it confirms that the Spanish economy is booming. For others, it is a statistical mirage built on temporary work, fixed-discontinuous contracts, and population growth. The discussion quickly shifts to familiar ground: Are Spaniards working more, or are there simply more Spaniards working?

Why do registrations rise if the population also grows?

The most repeated argument is demographic. Spain has gone from just over 46 million inhabitants to nearly 49, and with more people of working age, it is normal for contributor numbers to rise in absolute terms. The circulating calculation is simple: if we are two million more, the absolute record says less than it seems. Comparing with data from six or seven years ago, when the population was smaller, would be misleading.

The counter-argument does not wait long. Central banks monitor unemployment and inflation to decide interest rates, which would not be possible if both magnitudes were independent. During the oil crises, they recall, inflation and unemployment rose simultaneously. Stagflation exists. Denying any link between the two is as crude as claiming one causes the other.

Fixed-discontinuous contracts and uncounted hours

Here the debate becomes technical. The fixed-discontinuous contract figure, introduced in labor reform, breaks the statistical series: a worker who previously appeared as temporary now contributes as permanent even though he only works a few months. The result is a fragmentation of employment that inflates the number of workers while reducing effective hours.

The most cited data point is hours worked. There is talk of 650 million weekly hours, a figure lower than in 2019 despite having more registered workers. If total hours worked remain stable or decrease, some argue, real unemployment would be much higher than official statistics suggest. The gaining proposal is to measure everything in full-time equivalent workers, a long series without breaks since the eighties.

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Public sector jobs and 460,000 vocational students

Another pillar of skepticism points to the public sector. It is argued that part of the employment growth is due to the creation of public positions, a hidden subsidy that disguises the statistics. The request is recurrent: always segregate public employment and demand justification for each increase in an era of growing automation.

The most cited case is that of 460,000 vocational training (FP) students who started contributing at no cost to companies. If these contributors are counted like active workers, the registration record is called into question. The question, formulated on social media and reproduced in the debate, is whether those affiliations are computed in the same way.

The Spain that creates jobs and the one that can't make ends meet

Territorial contrast also appears. Andalusia, historically the champion of unemployment, boasts of growth and claims that those who don't work don't want to. Hospitality and agriculture absorb labor, but wages do not take off. Some call it well-being; others call it junk jobs with stolen hours.

Personal experience creeps into the analysis. A worker describes his time in an SME: supervisors complaining about earning €2,000, without safety measures, with loads above regulations. The bad atmosphere, he says, was general. It is not an isolated case: in the environment of several participants, the summer was full of people complaining about salaries and conditions.

The calculation that disorients

With 14.7 million workers doing the same hours as in the year 2000, the old calculation yields a 38% real unemployment rate. It is a rough exercise, without adjusting for working hours, but it illustrates the gap between official statistics and perception. GDP per capita, they add, has been falling for decades.

The complete detail, with the breakdown of hours, multiple jobs, and fixed-discontinuous contracts, shows a surprising difference. In Spain there are 600,000 people with multiple jobs who could be counted as two different workers. Added to those who work one or two hours a month, the picture moves away from first-world standards. And yet, unemployment falls. Someone will have to explain why.