The rain of bad omens that propitiates the difficult context that we have had to live hides a more hopeful reality: the good dynamics of the labor market. The first thing that catches your eye is the speed at which employment has recovered. In the Spanish economy, there were almost a million more people employed this May than before the pandemic broke out. Never in history have there been so many busy people. Without a doubt, this is a positive fact.
However, this is not all good news. The sharp rise in prices is eroding the purchasing power of much of the household. Wage earnings per employee rose 2.4% in April according to CaixaBank Research’s real-time wage indicator, but inflation climbed to 8.7% in May. However, it should also be noted that the total salary income, which takes into account the salaries of each employee and the growth in the number of employees, increased by 7.2% in the first quarter of the year thanks to the high pace of job creation.
Maintaining high dynamism in job creation is especially important because it increases the wage incomes of people who are in a more vulnerable situation. This is reflected in the rapid decline in inequality we are witnessing. According to CaixaBank Research’s real-time inequality monitor, inequality measured by wage income has already been reduced to pre-crisis levels. Even the groups that suffered most during the pandemic, such as young people, people born abroad or women, already have levels of inequality similar to those before the pandemic, or even lower.
A general improvement
The recovery of the labor market is also having a high social impact because it is widespread geographically and sectorally, and because the employment that is being created is of higher quality. Let’s get down to business, though. Today, all the Autonomous Communities already have a higher level of employment than before the outbreak of the pandemic. All sectors have also exceeded pre-crisis benchmarks. In addition, in recent years, those sectors that, in general, have a higher level of remuneration have gained weight. Finally, it is worth highlighting the high dynamism of indefinite hiring, so that the temporary employment rate is already close to 22%, which represents a reduction of 5 percentage points since the beginning of the year.
In the current context, the good dynamics of the labor market may be surprising. And certainly not all good news. The unemployment rate remains unacceptably high. Temporality, despite its recent dynamics, is still above European standards, and there are several groups in which the bulk of the most precarious jobs continue to be concentrated. The list of aspects to improve is much longer, but when a ray of light appears in the middle of the rain of bad omens, it should be highlighted.