Escrivá ends Sánchez’s electoral promise of achieving “full employment” in the next legislature and takes it until 2040

2023-10-12 02:42:18

For the President of the Government, Pedro Sánchez, and for his economic vice president, Nadia Calviño, “full employment” will have been achieved when an unemployment rate of 8% is reached. That is the objective that both set for themselves a little over a month ago, when they advanced the main lines of their labor policy if they manage to form a Government. At that time, they assured that to achieve “full employment” in Spain a structural unemployment rate of 8% would have to be reached at the end of the new legislature – although the economic concept of full employment is confirmed when it falls below 3%. To justify it, they used a semantic subterfuge, “objective full employment”, by which, through a set of investments and reforms financed with the European funds of the Recovery Plan, “the training, qualification and requalification” of workers will be improved. » and, with this, that goal will be achieved.

Well, the Minister of Social Security, José Luis Escrivá, has suddenly ended this promise by Sánchez in his latest report on pension spending projections for the coming decades. According to the Ministry’s experts, the unemployment rate scenario will stabilize at 11.4% until 2030, to drop to 8.7% in the period 2031-2040. That is to say, not even during the next decade do they have the forecast of reaching that 8% announced by the Sánchez-Calviño tandem. That figure would be achieved, according to this report, already in the period 2041-2050, when it could be lowered to 6%, half a point more, but 23 years after the Government’s promise. Another half point, to 5.5%, would fall in the next two decades, until 2070, so real full employment, stipulated in the aforementioned 3%, would never be reached.

Therefore, with this forecast, Social Security confirms the clear stagnation of the labor market starting in 2040, which will last for the next 30 years. The map of these projections, which the Ministry considers “prudent” and “credible” – and which they claim take into account “the structural transformations that are taking place in the Spanish economy” – shows that employment will grow by 1.4% until 2030 and, starting next year, a progressive slowdown will begin in which it will barely rise half a tenth per year until 2040. From then on, employment suffers an abrupt stagnation, only to be cut by just 0.1% between 2041 and 2050, and another 0.1% in the following decade. With our eyes set between the years 2061 and 2070, the variation will now be zero, 0%. In short, for the age group between 20 and 64 years old, the unemployment rate will go from the current 12.2% to 5.5% in 2050 and, from there, there will be little improvement.

At least in the short term, Escrivá does boast that the figures agree with the reforms carried out by the Executive now in office. According to the report, the boost in job creation in the ICT sectors, the reduction of temporary employment, the new ERTE and the reform of active employment policies “will have a notable impact on the reduction of structural unemployment”, in a way that the number of structurally unemployed will be reduced by 55%. For this reason, the Ministry dares to estimate the decrease in the structural unemployed at 510,000 people between 2018 and 2025, from 3.1 million unemployed to 2.6 million, barely 200,000 less than the current 2.8.

Ministerial analysts attribute this progressive stagnation to the inversion of the population pyramid, which contemplates a progressive aging of society, with an increasingly high number of retirees – due to the withdrawal of the “babyboomer” generation from the labor market – and fewer young people of working age. For this reason, the employment rate will go from the current 71.1% to 79.5% at the end of the projection horizon in 50 years, in addition to the fact that the employment rate at age 65 will go from the current 20% to around 55. % in 2050 and those between 66 and 70 years old from 5% to almost 22%, in order to compensate for the relationship between the active population and pensioners. The document points out that the total employment rate will increase especially among the youngest, due to the decrease in youth unemployment, and also in those over 64 years of age, due to measures to delay exit from the labor market. “This increase in the employment rate is fundamentally due to the measures to align the effective age with the legal retirement age,” although it also cites as causes “the tension in the labor market and the progressive deployment of the measures incorporated.” in employment promotion programs.

However, most of the growth in senior employment is based on incentives for delayed retirement almost doubling the number of workers who want to extend their working life, going from just over 4% to 8% of the total. retirement registrations. The Ministry also highlights that the check of 12,000 euros for each year that retirement is delayed will be an additional incentive for those who delay retirement to continue growing.