Spain Lost One Million Jobs in Second Quarter Due to Pandemic

July 28, 2020 Updated: July 28, 2020

MADRID—Spain lost one million jobs between April and June, its biggest ever quarterly decline, as one of Europe’s strictest coronavirus lockdowns pulverised the tourism-dependent economy, official data showed on Tuesday.

The National Statistics Institute said unemployment rose from 14.41 percent the previous quarter to a two-year high of 15.33 percent—but that masked the extent of the crisis by leaving out people on furlough and those not meeting technical jobless criteria.

The second quarter is traditionally good for labor as Spain’s tourism season kicks in. But that was paralyzed by the pandemic and a slew of new quarantines do not bode well for summer trade either, even though a lockdown was lifted in June.

 A woman looks at masks displayed at a souvenir shop Barcelona
A woman looks at masks displayed at a souvenir shop, amid the coronavirus disease (COVID-19) outbreak, in Barcelona, Spain, on July 27, 2020. (Albert Gea/Reuters)

Analysts polled by Reuters had forecast unemployment would reach 16.7 percent.

But for the first time in its long history of economic crises, Spain has made mass use of job protection schemes, known as ERTE, to limit redundancies in the face of forced closures.

If not, there would have been far more than the 1,074,000 job losses reported in the second quarter.

“The ERTE have proven to be effective in maintaining employment,” Secretary of State for the Economy Ana de la Cueva told a news conference.

Women, Young Worst-hit

As well as the furlough factor, many Spaniards did not meet technical criteria for the unemployment category such as actively searching for a new job.

The destruction of jobs was highest for people on temporary contracts, women and people aged 16-24, de la Cueva said.

The government data showed the intensity of the lockdown, with only 35 percent of the working population, around 14 million people, actually able to perform their job in the second quarter, mainly essential and home workers.

Despite the swathe of new unemployment, Spain’s jobless rate is still well below its 2013 peak of 26.94 percent when it was reeling from austerity measures in the wake of the global financial crisis.

But since 2018, the fall in unemployment has slowed, pushing back the goal of below double-digit unemployment.

Spain has recorded 278,782 coronavirus cases and 28,434 deaths.

By Belén Carreño