We have just learned the positive data on affiliates and registered unemployment for the month of July. Two records have been broken: the highest level of average affiliates in the historical series, with 19.6 million workers registered, and the largest drop in registered unemployment in a month of July, with a reduction of almost 200,000 workers.
This very vigorous recovery in employment is due to two differentiating factors in this pandemic crisis. On the one hand, the introduction of strong restrictions to avoid the collapse of the health system caused a strong destruction of jobs (mainly temporary workers). Once the pandemic is under control – thanks to vaccines! -, the return to normal it is allowing an intense recovery from it. On the other hand, the widespread use of ERTE, as a mechanism for flexicurity It has managed to cushion the impact on the labor market in an incredible way, protecting workers, with an indefinite contract, from the most affected activities (hospitality, leisure and tourism).
The negative part of these good data is found in the endemic evil of our labor market: the extremely high (unfair and inefficient) precariousness that is reflected in the fact that in a single month 2.3 million affiliates have been registered and 2.2 million have been discharged. In addition, enrollment in education has experienced a drop of 11% at the end of the academic year to save the salary of the summer months.
It is nonsense to have a job market that creates and destroys jobs so easily by abusing temporary contracts. There are still 331,000 workers in ERTE, who are registered with Social Security. The question here is how many will not rejoin because their companies have not managed to survive.
These figures, together with the good known data for the second quarter (EPA and GDP), as well as the good performance of tax collection, which in homogeneous terms already exceeds the pre-pandemic situation, allow us to affirm that the recovery is a fact . If there is no negative surprise from the pandemic, the next few months will be one of intense economic growth and job creation.
However, we do not have to be complacent with these data, because if we want to continue this growth beyond 2022 and reduce the precariousness of the labor market, it is necessary to carry out structural reforms, which go much further than raising the minimum interprofessional wage.
The labor market needs a balance between worker safety and company flexibility. Currently, some workers enjoy all the security (permanent contracts) and other workers suffer all the flexibility that the company needs (temporary contracts). We must aspire to a fairer job market design, where temporary hiring is restricted to a minimum, but in return permanent hiring is more flexible, reducing legal uncertainty by clarifying the causes of objective dismissal. Both contracts are communicating vessels. And, if we do not want to damage job creation, if one is restricted, the other must be made more flexible.
Jose Ignacio Conde-Ruiz He is deputy director of Fedea and professor of Economics at the Complutense University.