Why is unemployment rising in Spain and what is being done about it?

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The Spanish unemployment report for the first quarter (Q1) of 2024 was published on Friday morning and shows this unemployment in the country has risen from 11.80% in the first quarter of 2023 to 12.29%according to the National Statistical Institute (INE). It was also higher than analyst expectations of 11.80%.

This higher figure is because Spain continues to face difficulties, many of his employment contracts were temporarydue to the size of the tourism and hospitality sector, as well as its sizehas chronically low productivity.

Market measures to promote employment stability in Spain

Although it has increased from the previous quarter, Spanish unemployment remains very close to its historically low levelas a result of a number of labor market measures taken to support employment stability.

The Dutch financial institution ING recently stated: “ Although the unemployment rate in Spain is historically low, it remains much higher than in other eurozone countries. Several reforms, especially the 2022 labor reform, have successfully reduced the number of temporary contracts, improved employment stability and had a positive impact on unemployment rates. But further reforms will be necessary in the coming years.

“We expect the unemployment rate to continue to hover around these historically low levels in 2024. During the first months of this year, slowing job creation and labor force growth due to strong immigration flows could put some upward pressure on the unemployment rate.. »

However, ING also noted that accelerating economic growth would keep the labor market tight. “ For the whole of 2024, we predict an average unemployment rate of 11.6%. In 2025. We expect the unemployment rate to slowly decline to 11.2%. »

The annual report of retail in Spain for March 2024 was also published on Friday, with a score of 0.6%, down from 1.8% in February. However, it was still the sixteenth consecutive month of growth for Spanish retail. Monthly, Retail sales fell 0.5% in March.

Foreign workers could stimulate the Spanish labor market

Although Spain has one of the highest unemployment rates in Europe, it is still considered a dvery attractive work destination for a number of foreign employeesespecially those from Latin America, for several reasons.

A common language is one of the most important of these, as it greatly helps employees integrate into the local culture and find better-paying opportunities.

Likewise, The Spanish economy also benefits enormously from these labor migrantsbecause they are often highly qualified, but cannot find a suitable job in their home country due to global economic and political problems.

The Spanish catering and technology sectors in particular were stimulated by this phenomenon, such as the economic gains that the United States has made in recent decades thanks to the increase in immigration of skilled workers.