The labor reform is about to close its third anniversary with a positive balance sheet but with many contradictions: Spain has reduced temporary employment to its historical minimum and increased permanent employment, but this has not been transferred with the same intensity to the volatility of employment, which continues to lead the EU. In fact, the volatility of the labor market, expressed as the ratio of membership registrations to membership cancellationsremains at levels close to those of 2015, when Spain was still recovering from the financial crisis, largely supported by temporary employment.
The argument put forward to explain this phenomenon is that the number of members of the General Scheme has increased by four million people since then, which explains why the volume of registrations and cancellations remains at high levels. In this sense, it is worth talking about a reduction in volatility. In fact, if we refer to the data from August 2015, Volatility fell from 11.6% of payroll employment in 2015 to 9% last month.
A figure comparable to that of August 2020 (in the midst of a pandemic) but which occurs in a very different economic context, which would show a positive impact of the reform. But insufficient, if we take into account that the ratio is also comparable to that of the months of 2012, when the PP approved its labor reform, which the PSOE government and Sumar accuse precisely of having increased temporary work.
This is despite the fact that the entire net increase in employment over the last 9 years has been in permanent employment, which have climbed by 5 million (of which discontinuous CDIs represent 18%), while CDDs have decreased by 1 million. Thus, permanent workers have gone from 61.8% to 77.3% of employee affiliation.
The question is then clear: why has turnover not fallen much more sharply? Moreover: why does the evolution of registrations and cancellations not reflect changes in the regulation of the labor market? who revolutionized the way of recruiting in Spain?
Last August, 1.49 million registrations and 1.53 million cancellations of Social Security affiliation were recorded. During the same period, 1.04 million contracts were signed, 37% of which were of indefinite duration. In August 2015, there were 1.47 million registrations and 1.59 cancellations, over a period in which 1.25 million contracts were signed, of which only 6% were permanent.
In other words: with less contract turnover (because fewer signatures are produced and they are much more stable) volatility remains at high levels. In fact, it exceeds that of the entire previous historical series, which dates back to 2009. Moreover, continues to have a marked seasonal character (for that, For visualization purposes, the chart expresses the data as a three-month average).
Furthermore, the labor turnover data for 2024 are very similar to those for 2022 and 2023, which shows a clear disconnect between the evolution of this variable and that of contracts. which had never happened in previous years.
Dismissals, resignations and discontinuous permanent positions
The decrease in the number of contracts is fully in line with the very objective of the labor reform: with more permanent jobs, fewer contracts need to be signed. This fact, repeatedly recalled by the Ministry of Labor, has a negative side: Spain has a very high unemployment volume (2.6 million people according to the latest data) to consider in positive terms a decrease in hiring that It remains in place even as the reform is about to celebrate its third anniversary.
But the data on hiring takes on a different interpretation when compared to the data on registrations and cancellations of memberships. Without forgetting that these are very different statistics, they have always maintained a stable correlation. Thus, even if the vast majority of contracts give rise to affiliation to the General Social Security Scheme (which has moved in recent decades towards the unification of salaried work schemes), not all registrations recorded each month come from a contract. Some come from the reintegration of sick workers, or reactivated discontinuous fixed, and other hypotheses, even if the statistics do not detail them.
Yes, this is the case in the case of sick leave, where we see that 9 out of 10 people registered each month come from a worker who loses his job. The first cause continues to be the end of a temporary contract, which continues to represent more than half of the dismissals), followed by the transition to inactivity of a discontinuous CDI, resignations and dismissals. for failing the trial period.
This allows us to guess the cause of the aforementioned disconnection: there was a transfer of the weight of rotation from temporary weights to permanent ones, especially through discontinuous permanents. who come and go from inactivity and, to a lesser extent, resignations, dismissals and dismissals for failure to comply with the trial period.
Hiring vs. precariousness
Although the quality of hiring and the type of salaried employment have improved, the underlying reasons for the high turnover of labour in the Spanish economy persist. This means that the “real precarity” of employment has been reduced less than expected, despite the dramatic improvement in hiring.
This is not so much a sign of a conceptual failure of labour reform as of the absence of broader (and especially better-targeted) macroeconomic and budgetary policies that would promote job stability and accompany legal changes in hiring. For example, promoting a production model that generates activities with greater added value and therefore more stable jobs.
Although the government has presented a roadmap that claims to go in this direction, the fact is that the evolution of the labor market, and especially its “real quality,” is proof of its results. This is not the first time this has happened.
Precisely the graph allows us to analyze what happened.With the 2012 labor reform, which also arose from the commitment to improve the quality of employment and, in addition, coincided with an ambitious set of tax and financial reforms. But labor volatility has skyrocketed to levels well above those at the start of the financial crisis, a development that the 2021 legislation has only partially reversed.
