Spain, a country traditionally plagued with high unemployment issues over the years, appears to have turned a corner.
The European Union member state has suffered from a shadow economy and seasonal hirings. However, for the first time since 2008 and the start of the global financial crisis, Spain has seen its unemployment fall below the 3 million mark.
According to data released on Thursday by the Labour Ministry, the number of people registering as jobless dropped 3.29% in May from the month before, leaving 2.92 million people out of work.
Separate data released on Thursday from Social Security Ministry showed Spain added 33,366 net jobs during the month of May.
Moving From the Shadows
A big driver in the decline of jobless in Spain was more people moving from the shadow economy – temporary, cash jobs into the formal economy. After the number of formal jobs in the Spanish economy hit an all-time high in April, May saw a new all-time high.
Boosting figures was a post-COVID hiring drive by employers and the start of the Summer tourist season. Tourism is big business in Spain and accounts for approximately 12% of Spain’s overall gross domestic product. With the start of the season underway and travel restrictions mostly all but removed, authorities in Spain expect tourism spending to return to pre-pandemic levels by end of the year.
Social Security Minister Jose Luis Escriva told state broadcaster TVE, acknowledged the shift in working patterns with more people entering the formal Spanish economy from the shadow economy.
“We are seeing an extraordinary reduction in temporary jobs,” he said.
Escriva also acknowledged that although the unemployment figures were encouraging, he pointed toward the uncertainty ahead both in Spain and globally. The rising cost of living, rising inflation, and the ongoing war in Ukraine will have a knock-on effect that could hamper post-COVID economic recovery.
