Spain is the third country in the EU with the most temporary employment and the one that expels the most workers into unemployment each quarter

The labor reform approved in 2021 has allowed the temporary employment rate in Spain to drop from 26.4% in the second quarter of 2019 to 17.4% in the same period of this year, according to Eurostat data, a decrease that would be very higher if the public sector had been affected by the new rule, but it has not allowed us to improve our relative position compared to the rest of the countries of the European Union.

This is reflected in the Quarterly Labor Market Observatory of Fedea, BBVA Research and Sagardoy Abogados published this Thursday, which highlights that Spain is the third country in the EU with the highest rate of temporary employment, only behind Portugal (with a rate of 17.9% in the second quarter of this year) and the Netherlands (with 27.7%).

The EU average is 14.6% but there are countries with much more stable labor markets, such as Lithuania, where only 1.9% of workers have a temporary contract; the Romanian, with a rate of 2.5%; Latvian (2.8%) or Bulgarian (3.4%). “Spain continues to occupy third place in the temporality ranking, at a considerable distance from most of the rest of the European countries. The methodological changes introduced by Eurostat have placed the Netherlands in the lead, with a rate of 27.7%. In the last positions are the Baltic countries, whose temporary employment rates range between 1.9% and 2.8%,” they explain.

Despite the improvement registered in Spain in terms of the incidence of temporary hiring, employment stability has not improved much in other aspects. For example, it is the country in the European Union that annually expels the most people from employment to unemployment (around 3% of employed people, according to Eurostat data), well above the community average.

“Spain continues to stand out for its high quarterly rates of exit from employment to unemployment, which still exceed that of the rest of the EU countries and more than double the EU average,” they note, in addition to pointing out that “no changes are observed between 2021 and 2022”, which rules out an improvement after the labor reform.

Rafael Doménech, head of Economic Analysis at BBVA Research, explained yesterday that “employment stability is a multidimensional concept. If we compare the temporary employment rate, we see that that of Spain is practically half that of the Netherlands; But if we look at the transition from employment to unemployment, Spain's position has not changed and is triple that of the Netherlands.. “They are complementary definitions and very useful to know the real stability of employment.”

“A labor reform is not enough to change the precariousness patterns that we have accumulated for 40 years,” said Florentino Felgueroso, a Fedea researcher and expert in the labor market.

The problem of discontinuous fixed

The drop in temporary employment has been done in favor of the increase in workers with discontinuous fixed contracts – a type of indefinite contract -, although experts demand data on the intensity of these contracts (how long these employees actually work) and their intermittency. (in what periods are they stopped).

Felgueroso highlighted that “since the labor reform came into force, more than 3 million discontinuous permanent contracts have been signed.. However, the average affiliation remains around 500,000 workers, so this difference has to do with the short duration of the registrations and the fact that they work in sectors with a lot of turnover.”.

In this sense, he demands more data on the profile of the worker with this contract: “If the Minister of Labor [Yolanda Díaz] could answer the question of who the discontinuous permanent workers are…. “We don't know if they are very vulnerable people who are stuck in the trap of vulnerability or they are people who for a time need a contract of this type.”. He gives as an example of this second group a young engineering student who during the summer works as a waiter to obtain extra income, “even if they give him an indefinite contract in the summer, he is going to leave in September to continue with his career, he does not is missing or that they fire him,” he points out.

However, in some cases, discontinuous permanent employees are most likely permanent because they cannot find employment with an ordinary, full-time indefinite contract, which is why they believe that it would be convenient to analyze the degree of involuntariness in this type of contract, as is done with those who are part time.

“The workers who are trapped in this type of contract are the ones we have to look at, they are people who work for a short time and for little pay.. We have to see how many there are and who they are, and not say that they are few. Few are not because there have been 3 million contracts and half a million affiliates on average per day plus those that are not activated,” he claims..

Discontinuous permanent workers gain security compared to temporary workers, they receive compensation specific to the indefinite contract and accumulate seniority from the day the contract is signed – even if they work four days a year – although Felgueroso warns that the latter can discourage employment. : “it can lead them to cling to their job even though they have hardly worked at all”.

In addition to a breakdown of the profiles, he and the rest of the researchers continue to demand from the Ministry the number of discontinued permanent workers who are inactive each month, in order to know more exactly what they call 'effective unemployment'.