Spain’s unemployment rate inches up to three million

Spain's unemployment rate edged up slightly to 12.48 percent in the third quarter of this year after declining steadily since the end of 2020, official data showed Thursday.

Spain's unemployment rate inches up to three million
Some half a million people lost their jobs in 2020 in Spain, which has one of the highest rates of unemployment in the Organisation for Economic Co-operation and Development. (Photo by SEBASTIEN BERDA / AFP)

The jobless rate inched up to 12.67 percent in the period from July to September from 12.48 percent in the previous three-month period, national statistics institute INE said in a statement. Youth unemployment now stands at 31 percent.

The number of unemployed people rose by 60,800 in the third quarter to a total of 2.98 million even though 70,000 jobs were created, with most jobs lost in services, including Spain’s key tourism sector, and agriculture.

The jobless rate was still lower than during the same period a year ago when it stood at 14.57 percent.

The number of job seekers in Spain fell below three million in May for the first time since November 2008 at the start of the global financial crisis.

The fall in joblessness was due to a rebound in Spain’s tourism sector following the end of most pandemic travel restrictions and a labour market reform which limits the back-to-back use of temporary contracts.

The number of permanent contracts in Spain in the third quarter rose by 444,200.

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 Organisation for Economic Co-operation and Development.

The government predicts the jobless rate will drop to 12.2 percent at the end of 2023 despite a slowdown in the economy due to soaring inflation and the uncertainty caused by the war in Ukraine.

But many analysts are much more pessimistic. Investment bank ING predicted Spain’s unemployment rate will rise steadily to 14.3 percent in the third quarter of 2023.

It expects the Spanish economy, the eurozone’s fourth largest, will enter a mild recession in the fourth quarter of 2022 that will continue until the first quarter of next year.

“Business confidence has also deteriorated sharply in recent months, which will encourage companies to be more careful with new hires,” ING economist Wouter Thierie said in a research note.

The higher share of permanent contracts, however, will cause the rise in the jobless rate to “be less pronounced than during previous recessionary periods”, he added.

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Spain court rules against Amazon over freelance drivers

A Spanish court has ruled that over 2,000 people who used their own vehicles to deliver packages for Amazon as self-employed freelancers should have been hired by the firm as formal employees.

Spain court rules against Amazon over freelance drivers

The Madrid labour court said in Thursday’s ruling that these workers were “false freelancers” who should have been tied to the US firm with work contracts.

It also ordered the online shopping giant to pay social security contributions for the 2,166 people it hired under the guise of freelancers, according to a copy of the ruling seen Friday by AFP.

The court did not say how much the measure would cost but Spanish trade union UGT, which filed the complaint against Amazon, put the price tag at “several million” euros.

The union said this is the first time a court has ruled against the company’s Amazon Flex service, which works like ride-hailing service Uber.

Drivers use an app to sign up for shifts to pick up packages at warehouses and deliver them to Amazon customers’ doors.

Amazon Flex ceased operating in Spain in 2021 just before the country passed a law requiring delivery riders to be recognised as employees instead of self-employed contractors.

READ ALSO – OFFICIAL: Delivery riders become company staff as Spain’s labour reform kicks in

UGT said it would “continue to fight so that the rights of workers who provide services on digital platforms are respected” and to avoid “situations of labour exploitation”.

Amazon had argued it only acts as an intermediary that connects retailers and distributors – a claim rejected by the court.

It said in its ruling that Amazon used an app to direct and coordinate the drivers who “lacked their own autonomous business organisation”.

Amazon said it disagreed with the court’s rationale and would appeal the ruling.