Data from the State Public Employment Service (SEPE) reveals a surprising contradiction between the evolution of social protection for unemployed people and that of the labor market itself. Despite the drop in unemployment, the beneficiaries of this aid remained practically unchanged, even with an increase of 0.9%. The most surprising thing is that moderation only occurs at the level of care, that is to say that of integration aid and income. People who receive a contributory benefit, the first to which an unemployed person is entitled after stopping working, they grow at an interannual rate by 5.4%: exactly the same percentage reduction in registered unemployment. The key seems to be in increasing the number of people affected for dismissal and discontinuous permanent positions.
And spending on unemployment benefits is a thermometer not only of job destruction, but of the quality of what is created. In 2019, a development similar to the current one had already been recorded: unemployment decreased, but benefits increased. Then the alarm went off over what amounted to a sharp slowdown in the job market, as it is today. But the effect of these moments focused on the expiration of temporary employment. In other words, volatility in the labor market. However, even though there are now more permanent contracts, the situation does not seem to have improved. Indeed, the number of beneficiaries of contributory benefits has increased by 1.8% since then, going from 770,109 to 783,907, despite the fact that registered unemployment has fallen by 17% over the past five years.
Thus, workers who receive unemployment at the end of temporary contract decreased by 52% compared to September 2019, from 332,110 to 162,069, while those affected by layoffs increased by 42%, to 328,489. For their part, inactive discontinuous assets increased by 187%. . These two groups continue to account for most of the increase in the number of benefit recipients over the past year, although the weight of those laid off is considerably greater.
The average cost of the service increased from 27.55 in September 2019 to 32.96 euros. But it is not because the jobs are better, but because in 2022 the government repealed the reduction in benefits approved by the PP a decade earlier. This change means that after six months, the benefit is no longer calculated on 60% of the contribution base, instead of 50% previously. What does this mean? That the increase in the beneficiaries’ payroll is not due to the fact that these were better quality jobs (with better salaries, more time devoted and which generates higher social benefits), but to this legal change.
Regardless, the trend seen so far in 2024 provides worrying signs. Last September, 1.7 million people were receiving unemployment benefits. The beneficiaries of the contributory level numbered 783,907, or 39,885 more than in the same month of 2023, despite the fact that registered unemployment was reduced by 147,183 people. The beneficiaries of the aid level, which represent 833,587, have indeed decreased, but only by 1.7%. Those receiving unemployment benefits, which total 685,194 (40.2% of the total) they only decreased by 0.8%.
An “inflated” coverage rate?
This very uneven development has led to an increase in the coverage rate to a historic level of 72.2% since the start of the year. They are up 4.5 percentage points compared to a year ago. The government attributes this to an improvement in protection against unemployment after the repeal of budget cuts approved by the PPbut this statement admits quite a few nuances. Mainly statistics.
It should be remembered that the rate is calculated as the division between the number of beneficiaries of allowances and subsidies and the sum of registered unemployed people with professional experience and beneficiaries of agricultural aid (former PER). The number of registered unemployed people, with professional experience, during the month of September 2024 was 2,334,247. They represent 90% of the total and 5.7% less than a year ago.
However, there is an extreme case: the Balearic Islands, which bring its rate to 140.7%. What does this mean? That there are more people receiving unemployment benefits than unemployed people who have paid into them. A paradox which can only be explained by dismissed permanent employees who see their contract suspended when they become inactive and can receive compensation.
This is a similar situation, although of less intensity, to that caused by those affected by ERTE during the pandemic: according to the General Social Security Law, both are considered “persons in a legal situation of unemployment”, although they do not count. for the calculation of registered unemployment, which includes only those who are not working, but are actively seeking work and are available to do so. A case in which neither person has a “current” employment relationship, even if it is suspended.
The example of the Balearic Islands represents a region in which seasonal activity linked to tourism is carried out by workers holding this type of contract. But since the labor reform, the weight of intermittent permanent employees has increased substantially and in more and more sectors. This implies that those who receive a benefit have also done so. Most only charge the contributory level.
This is not the only effect of discontinuous immobilization on benefits. And many agricultural workers began to work according to this modality, which reduced the beneficiaries of agricultural income and subsidies (equivalent to the old PER), which fell respectively at a rate of 5.5% and 6.4% over one year.
But how many permanent intermittent workers receive a contributory allowance without counting as unemployed? In September, there were 90,370, or 11.5% of the total and 4.2% more than a year ago. However, they are far from being the determining factor explaining the increase in benefits over the past year. This role corresponds to layoffs.
The burden of layoffs
41.9% of people who received compensation last September were victims of individual dismissal. They represent 328,489, or 9.24% more than in the same month of 2023 (and, as we said, 42% more than in 2019). In other words, if discontinuous assets are discounted, the benefits would surely continue to increasesince the layoffs would compensate for the moderation from one year to the next among those who become unemployed after the end of a temporary contract, those affected by ERTE or victims of collective layoffs.
The evolution of contributory benefits is striking if we compare it to the 2.5% reduction in the level of assistance among beneficiaries. Added to the aforementioned drop in agricultural income beneficiaries is the collapse of 9.8% of Active Integration Income beneficiaries. But let’s remember that unemployment benefits, which total 685,194 beneficiaries, or 40% of the total, barely decreased by 0.8%.
This development indicates that long-term unemployment remains well entrenched, particularly for those over 55 who, according to the SEPE, “the vast majority receive the allowance until retirement age”. But the increase in layoffs generates a new type of duality between short-term indefinite periods and more stable periods, similar to those previously caused by temporary periods.
However, the unknown concerning the evolution of benefits and subsidies continues to raise doubts about the solidity of the labor market. Which pushed the government to act. On November 1, the reform of unemployment protection which, although it focuses on the level of assistance, that is, subsidies, also includes important novelties that also affect the beneficiaries of the benefit contribution, in particular the obligation to subsequently file the income tax return. year, under penalty of losing the aid.
Although the fiscal effects depend on the situation and income of each unemployed person, it is undeniable that the measure does not have a collection objective and seeks to better control the situation of all people who receive a benefit, both a subsidy assistance than a contributory contribution. advantage.
The executive, however, hesitates to explain the aim of this “supervision” of the unemployed. When asked directly about elEconomista.es Regarding the questions raised in this article, the department led by Yolanda Díaz has not provided any answers.
