The drop in November unemployment does not account for 114,000 discontinued workers who stopped working

Unemployment fell in the country by 24,573 people in November, which was the second largest drop in unemployment for this month without counting the pandemic, but this evolution is distorted because, after the labor reform, all workers with a discontinuous permanent contract who become inactive and even begin to collect a benefit, are not counted as unemployed. In November, a total of 114,000 were unemployed but they are not counted as such, so unemployment would have grown by around 90,000 people if they had been taken into account.

This is clear from the affiliation and unemployment data published yesterday by the ministries of Social Security and Labor, according to which although 115,500 salaried jobs in the hospitality industry were destroyed due to the end of the tourist season, these were not counted in the unemployment.. The reason is that all of them were permanent, discontinuous workers.

Given that the registered unemployment data are, for this reason, not reliable, it is advisable to analyze the affiliation data.. These show that employment in the country fell by 11,583 people in November, a much lower decline than that traditionally recorded this month (23,219 jobs between 2014 and 2019), which reflects that the labor market slows down due to the environment. of economic uncertainty but continues to grow. The hospitality industry was the sector most affected by seasonality, but its layoffs were offset by hiring in education and commerce, given the arrival of Christmas shopping.

“Social Security affiliation surprised on the rise,” said BBVA Research. “The number of Social Security contributors fell by 11,600 (2.6% year-on-year) due to seasonal causes, to a lesser extent than expected (BBVA Research had predicted a drop of 37,200 people). The gross evolution of membership was somewhat worse than that recorded in the months of November since 2020, but better than the median of the last decade. Discounting the seasonal component, BBVA Research estimates indicate that the number of affiliates would have grown by 25,000, 2,500 more than in October.”

From Funcas they have pointed out that “employment growth continues to moderate”, since “Social Security lost 11,583 affiliates in November, a lower decrease than usual in that month, which in seasonally adjusted terms is equivalent to an increase of about 10,350. This figure is around the average of the previous three months, but is lower than the nearly 75,000 new monthly net affiliates in the first half of the year.”.