The map of unemployment ‘hidden’ under the discontinuous permanent contracts turns against the PP

The clash between the Government and the opposition account of employment statistics has worsened in recent months due to non-compliance by the second vice president and Minister of Labor, Yolanda Diaz, of its commitment to publish the figures of inactive discontinuous permanent employees registered in the public employment services. While the ‘popular’ insist on denouncing an opacity that ‘makes up’ the unemployment figures, Labor now affirms that it is the communities those who must give these figures. A twist in the script that responds to the fact that the regions with the most ‘effective’ unemployed hide Now they are governed by the PP.

The concept of ‘effective unemployment’ was coined by the researcher Florentino Felgueroso in the context of the Labor Market Observatory published every quarter by Fedea and BBVA Research. This metric adds to the registered unemployment the job seekers with an employment relationship, the category in which the discontinuous permanent workers are included who, in the periods in which they do not work, register at the employment offices. The percentage difference between both data would be the supposed real unemployment not collected by conventional statistics.

The territorial ranking is led by Balearicswhere there are more claimants with an employment relationship than unemployed, which leads to the gap between effective and registered unemployment reaching 161%, followed by Murcia (41.3% difference), Estremadura (33.1%), Aragon (30.2%) and Valencia (29.2%). At the opposite extreme are Madrid (9.9%) and the Canary Islands (8.1%), also governed by the PP.

It is true that the majority of the Spanish political map is now dyed blue and that regions like Balearics, Valencia, Extremadura, Aragón were between 2015 and 2023 considered ‘fiefdoms’ of the PSOE led by Pedro Sánchez. The political shift helps explain Díaz’s change of position, who now directly challenges the ‘popular’ to revealr the data of that supposed makeup in the regions it governs. Something that they can do perfectly since the regional public services are responsible for registering and classifying employment requests.

The ‘effective unemployment’ metric is controversial and it is indicative in nature since, as we have reported in elEconomista.es, claimants with an employment relationship also include other people with jobs and also discontinuous permanent employees who are working. Furthermore, it does not coincide with other references, such as that of the discontinuous fixed ones that collect unemployment or EPA microdata.

The Government has always flatly rejected Fedea’s analysis and more than a year ago he promised to publish the complete data. He did so only partially, in a parliamentary response to the Popular Group in the Senate leaked in February 2023 that revealed that at the end of the previous year, the first with the labor reform in force, the number of inactive discontinuous permanent workers who were “excluded” from the registered unemployment It reached 443,078. In that month of December, the SEPE data showed 622,184 claimants with an employment relationship.

Despite this difference, the evolution of the 2022 data provided by the Government reflected the same upward trend as the claimants with an employment relationship. That is, the increase in the latter It is primarily due to the inactive discontinuous fixed assets.although not all of them are.

That was the only official figure provided by the Ministry of Labor with your own databases, although it seems that they immediately regretted doing so, and even claimed that it was an incomplete and unclean analysis. But those ‘definitive’ figures remain unknown. The last time Díaz responded to this question, it was in the Senate a few weeks ago and he provided some data extracted from the EPA that created confusion because they didn’t even matchwith those of permanent discontinued recipients of unemployment benefits collected by the SEPE.

A strong argument for the PP

For its part, the PP has embraced the fact of Felgueroso’s effective unemployment in its argument to ensure that there are more than 700,000 ‘hidden unemployed’. Some leaders even raise the figure above one million, adding all employed job seekers. Of course, these calculations focus on the discontinuous permanent contracts promoted after the labor reform, and ignore other metrics such as unemployed people not classified as unemployed that do recognize official statistics such as those of the EPA or Eurostat.

Faced with this offensive, which Labor points to the autonomous communities as ultimately responsible for publishing this data has a clear political reading of which in Genoa they do not seem too aware: the majority are governed by the PP. If the gap between effective and registered unemployment is regionalized, the same accusations of makeup of the para and masking of precariousness can splash opposition executives that in recent months have taken advantage of the reduction in unemployment and job creation, while they criticized the opacity of the central Executive.

Even though they know perfectly well the weight of discontinuous fixtures, since they are the ones who have the powers to register, attend to and classify employment demands. It is after this screening that the SEPE carries out the procedures to meet the corresponding demands for unemployment benefit or subsidy.

In fact, in the two years of controversy surrounding the impact on unemployment data of inactive discontinuous permanent employees, in which there have even been adjustments in unemployment figures due to errors in the accounting of discontinuous permanent employees, as occurred at the end 2022, the position of the regions has been cautious when talking about these problems. The most belligerent, in any case, has been Madrid. Logical, taking into account the Executive of Isabel Diaz Ayuso can boast one of the smallest gaps in supposedly ‘hidden’ unemployed.

A gap that points to the new ‘popular’ governments

To calculate this gap, we cannot use the Labor data, not even those for 2022, since at the time they were not published regionalized. The only thing that can be done is to calculate the difference between ‘effective’ unemployment, as measured by Fedea, and registered unemployment. That is, how much the claimants with an employment relationship would contribute to the unemployment. Although this methodology is still very problematic, it is at least indicative, since it clearly responds to the increase in discontinuous permanent employees registered as job seekers. And it is the metric that the PP embraces as a reference for ‘hidden unemployment’.

If we do this exercise with the latest available data, from March, we see that the number of claimants with an employment relationship was 662,881 people (9.9% less than in February). Added to the 2.7 million registered unemployed, this gives a figure of 3.4 million ‘effective’ unemployed, a figure 24.3% higher than the unemployment figure published by the SEPE. However, the percentage fluctuates greatly between communities.

In the Balearic Islands, the gap exceeds 160%. That is to say, there are more applicants with an employment relationship than unemployed. This is because it is the community in which historically this type of contracts have been used with the greatest success, always oriented towards the tourism sector. This is a trend that labor reform has only reinforced. However, the other tourist community par excellence, the Canary Islands, It has a gap that barely exceeds 8%, the lowest except for those of Ceuta and Melilla.

On the other hand, Aragon, the Basque Country and Navarra, regions with high industrial activity, exceed the national average. A contradiction that seems to refute the idea that regions with lower ‘effective’ unemployment bet less on this contractual formula or do so in positions with greater stability, and in which the opposite occurs, volatility is greater and is linked to seasonal activities.

But it must be taken into account that the labor reform, although it did not create discontinuous permanent contracts, did expand their use to more sectors, such as industry, to replace temporary ones. AND This results in a greater number of recurring inactive people in regions where tourism is not the main engine of the economy, as was the case in the Balearic Islands.