Government observes how recovery in Spain translates into job creation

Moncloa Palace, Madrid

The Council of Ministers analysed a report on employment trends in Spain during the period from December 2011 to December 2016. The text contains the figures on job creation in all the autonomous regions, provinces, sectors, age groups and worker groups. The report also stresses the reduction in unemployment over the last 12 months and the increase in National Insurance contributors.

The report reflects that overall economic growth has translated into job creation and that the Spanish economy started to create permanent jobs from the very start of the recovery, with 35 straight months of increases in permanent employment contracts.

The Minister for Employment and Social Security, Fátima Báñez, asserted that "this recovery in the form of opportunities" is the result of the shared efforts and commitment from Spanish society.

Fátima Báñez highlighted that unemployment was growing, in year-on-year terms, in December 2011 at a rate of 7.86%, but is now falling at a rate of 9.54%. "This presents the reality of the situation without triumphalism", she said, because the challenge facing the government is to offer opportunities to the more than 3 million Spaniards that are still registered as unemployed.

The minister also highlighted that 2016 closed with an "all-time record" in terms of falling unemployment numbers. Over the last 12 months, she said, "it has fallen unprecedentedly", by almost 400,000 people. Spain has gone, over the last five years, from contributing half of all the new unemployed in the European Union to being responsible for a 40% reduction in unemployment in the Eurozone.

According to the minister, the most important aspect is not just that unemployment is falling but that jobs are being created. In this regard, she pointed out that in 2011, jobs were being shed at a rate of - 2.02%, whereas they are now being created at a rate in excess of 3% and there are more than 17.8 million National Insurance contributors. "Spain has recovered half of the jobs lost as a result of the crisis. Of the almost 3.3 million people who lost their job during the crisis almost 1.7 million have now found a job. Hence, we have recovered almost 51% of the jobs lost", she clarified.

Social recovery and commitment to talent

Fátima Báñez argued that "this job recovery is highly socially-orientated" because it is growing throughout Spain, in all economic sectors and all age groups. "The main challenge for Spain over the coming years is for our country to be competitive where it excels, in the main strategic asset of our companies, which is talent - human capital. And we are recovering all the talent lost through the crisis by creating jobs", she stated.

Moreover, she underlined that job creation among young people is growing at a rate in excess of 8%, double the overall rate. The number of independent contractors is now 125,000 higher than posted in December 2011, and nine out of every ten people who left the unemployment queues over the last year were long-term unemployed.

Pool Moncloa/Diego CrespoAccording to the figures offered by Fátima Báñez, this recovery has also been particularly felt by women. "There have never before been so many women working in Spain. We have recovered all of the jobs that women lost during the crisis and, moreover, we now have the highest number of female contributors in our economic history, with 8.28 million women in work".

The minister also pointed out that over the last three years, the number of people with disabilities in work has reached the figure of 225,000.

Economic reform and permanent employment contracts

The Minister for Employment recalled that all the national and international organisations have highlighted that "all this economic growth has strongly translated into job creation". In national accounting terms, year-on-year growth in Gross Domestic Product stands at 3.2% and job creation at 2.9%.

As a result of the reforms introduced in the previous term of office, "Spain began its economic recovery with growth in permanent employment since the outset". "We have seen 35 straight months of rises in permanent employment contracts" and there are more salaried workers employed under this form of contract than at the start of the crisis, stated the minister.

73% of people have a permanent employment contract in Spain, and it is the government's intention "to be more pro-European in this and reach the European average, which is eight or nine points higher", announced the minister.

Recovery of purchasing power and challenges

Fátima Báñez reported that this recovery is allowing some half a million jobs a year to be created, with moderate gains in purchasing power.

"It is very important for us to continue with a healthy model of growth that leads to gains in purchasing power for workers. Hence, higher salaries each year, in a moderate manner, more competitive companies to continue building our country and let's not forget that we need to continue incorporating some 400,000 to 500,000 Spaniards a year into the ranks of the employed because there are still 3.7 million of our citizens without job opportunities", she concluded.

Conflicts of functions

Pool Moncloa/Diego CrespoThe Council of Ministers approved the filing, before the Constitutional Court, of two conflicts of functions as a result of a decision by the Board of the Lower House of Parliament to admit two draft bills for their passage through Parliament, one relating to the calendar for the application of the Constitutional Law to Improve the Quality of Education (Spanish acronym: LOMCE) and another on the labour conditions of sub-contracted workers.

Íñigo Méndez de Vigo underlined that this is not a debate on the heart of the matter, but rather seeks to ensure the government's constitutional right to challenge any legislative initiative that involves higher spending or a reduction in revenue, which constitutes "an essential rule of any democratic Parliament". If the government were unable to exercise this right, he argued, "the General State Budget would lack any legal form".

The minister also recalled that, in the specific case of the LOMCE, the aim of the draft bill was already resolved by means of a Decree-Law to extend the calendar for the application of the legislation, which was ratified by a very broad parliamentary majority.

Ambassador to the United Kingdom relieved of duties

Under the heading of appointments, the Government Spokesperson mentioned the appointment of Juan Ignacio Romero as Secretary-General for Regional Coordination and María Victoria Morera as Spanish Ambassador to Germany.

Íñigo Méndez de Vigo also reported that the government has agreed to relieve Federico Trillo as Ambassador to the United Kingdom, at his personal request. When asked about his potential incorporation on the Council of State, the Government Spokesperson answered that Federico Trillo should offer a statement in this regard, given his position as a public servant of this institution.

Conference of Regional Presidents

Pool Moncloa/Diego CrespoThe minister insisted that this term of office must be one that seeks consensus to the benefit of the people of Spain as a whole and reviewed the benefits that this dialogue has already reaped at a political and social level. The approval of the budget stability targets, the measures to protect the most vulnerable electricity consumers and the increase in the minimum wage were among the agreements he referred to.

In terms of the third aspect of this dialogue - regional dialogue - Íñigo Méndez de Vigo highlighted the 6th Conference of Regional Presidents, to be held on 17 January, which the Central Government and the regional governments hope will be consolidated "as the preferred location to channel relations" between them. He also praised the climate of "cordiality" and "collaboration" in which the preparatory meetings to the conference have been held. "Our citizens must be made to feel that we are working together to resolve their problems", he declared.

The conference will be structured in a deliberative session and a decision-making session. Central Government and the regional governments will try to close agreements on such diverse issues as the sustainability of the Welfare State, education, powers in regard to civil protection, market unity, the social card, the suspension of the electricity supply, the participation of the regions in EU affairs and employment policies, specified the Government Spokesperson.

As regards whether the absences announced by the Presidents of the Regional Governments of Catalonia and the Basque Country will weaken the conference, Íñigo Méndez de Vigo stressed that issues of "enormous importance" will be addressed for all our citizens. Some may see these absences as a lack of interest in the "problems of our people", he said. At any event, he remarked that those citizens of autonomous regions whose regional president does not attend this forum should not be unduly concerned since "the Government of Spain will also be looking out for them".

Extension of the economic recovery

Pool Moncloa/Diego CrespoÍñigo Méndez de Vigo remarked that another of the government's priorities for this year is to continue down the path of fiscal consolidation and the agenda of reforms. As a reflection of the positive direction of the economy, the Government Spokesperson referred to the latest figures announced on the growth in GDP - almost double the Eurozone average - an all-time record for inbound tourists visiting Spain in 2016 (more than 75 million), the increase in automobile sales and the increase in authorisations to build new homes.

"We have passed from the enormous recession to recovery, what we must do now, and this task falls on the government and the rest of the political forces, is step up the pace and try to ensure the effects of the recovery reach the whole of society, sharing out the results obtained", he declared.

Other current affairs

As regards how consumers are going to be protected so as not to see a repeat of such abuses as the 'floor clause', the Government Spokesperson explained that the Minister for Economic Affairs is negotiating both the procedure relating to the enforcement of the ruling handed down by the Court of Justice of the European Union, and the transposition of the European Directive on mortgages. According to the government, it is very important "to undertake a great exercise in transparency at all levels", something which is fundamental in relations between a banking institution and its client.

As regards whether the government considers issuing debt to guarantee pensions as a potential solution, Minister Báñez argued that the best guarantee for pensions is jobs, and hence the importance of the current recovery in this respect.

However, if a "specific yet temporary" problem arises, pensions may be paid with the instruments available to the system, such as the Reserve Fund, and should it be necessary, with State resources. It would not be the first time, she added, that these are paid with credit or through issuing debt, and this was in fact done in the past by a PSOE government.