Why is Spain's labour market booming?

Last year Spain created 780,000 new jobs, more than ever before, accounting for 44 percent of all new jobs in the Eurozone. One factor behind this positive trend is probably the strong economic growth of 2.5 percent. Nonetheless, the country's unemployment rate is still the highest in the EU, particularly among young workers.

Open/close all quotes
El País (ES) /

Good policies and European cash

The money from the EU's Covid recovery fund and an effective labour market policy have made this upturn possible, comments El País:

“Neither the stress of national politics nor the global uncertainty amid two wars can cloud this picture. ... In such a favourable scenario under extremely adverse circumstances, it is very tempting to think that employment and economic activity are decoupled from political events. But nothing could be further from the truth. On the one hand, the favourable data is partly the result of political decisions. On the other, it's hard to believe that without budgets that make the most of European funds the bonanza can continue indefinitely.”

Cinco Días (ES) /

The reform is bearing fruit

Cinco Días is jubilant:

“This milestone comes two years after the labour reform, which aimed to reduce temporary employment and restore workers' rights while at the same time clarifying certain situations for companies. ... Over the last two years more than 2.3 million permanent contracts have been created, while the number of fixed-term contracts has dropped by 1.5 million. ... The figures are very positive. But we should not become complacent. ... A lot is changing on the labour market as a result of new technologies, the energy challenge and the ageing population.”

El Mundo (ES) /

No resting on our laurels

El Mundo sees a fly in the ointment:

“Rising labour costs - mainly due to higher social security contributions as a result of the pension reform - could start putting a brake on hiring, as the ECB has already warned. At 28.3 percent, Spain has the highest youth unemployment rate in the EU. This figure is unacceptable because it condemns the new generations living on benefits. ... Only open-economy policies that promote employment opportunities and help young people to launch business start-ups can ease this burden.”