When a piece of news is predictable, its interpretation comes from the details. This is what happens with employment data. Before the figures for registered unemployment and Social Security affiliates for January were made public this Thursday, it was already known that these were not going to be good, because at the beginning of the year they almost never are, coinciding with the end of the Christmas campaign and sales. The key is to figure out how bad these figures are and the trend they may have. In January, unemployment rose by 70,744 people compared to the previous month in Spain, and the destruction of employment also increased (215,047 less employed persons). In general terms, the outlook is no worse than the last recession, and the Government highlights that the seasonally adjusted data are even positive. And there is still a more favorable element, product of the labor reform that has already been in force for a year: stability continues to increase. New permanent contracts represent 45% of the total (of which one third are fixed discontinuous). It could be said, therefore, that employment is for the moment withstood the heavy blows of the war and inflation.
The trend for the coming months, however, remains unclear. The uncertainty that surrounds the economy from the invasion of Ukraine and the energy crisis has not dissipated and the latest rate hike by the European Central Bank (ECB) suggests that the inflation will continue to be a matter of concern. Precisely to alleviate the effect of the price increase on the most vulnerable workers, the Government announced this week an increase in the minimum interprofessional wage (SMI), from 1,000 to 1,080 euros gross in 14 payments. A rise agreed with the unions, but without the employers, as already happened with the previous one. The SMI is relevant not only for those who receive it directly (some 2.5 million workers), but also because it is used as a reference in some agreements.
The workers who are paid the least are the ones who suffer the most from the loss of purchasing power and other European countries have also approved increasing the SMI. In addition, the previous rise in 2022, contrary to the worst predictions, did not harm job creation. But the current situation is not the same, because although the Spanish economy managed to close 2022 with growth of more than 5%, forecasts for 2023 point to a slowdown considerable (the IMF places it at 1.1%). The companies that have not been able to affect their sales from the rise in prices have been affected by inflation in the same way as the rest of the citizenry, and a rise in the SMI represents a additional increase in labor costs that can put pressure on the accounts of small and medium-sized businessmen (not all companies have million-dollar benefits). To which is added the effect of the rate rise, which will make financing more expensive for everyone: states, individuals – we see it with the Euribor – and also companies. And we will still have to be aware of the risk that a wage increase may entail in inflationary times, which is that raise prices even more, in a vicious circle. The strength of the labor market will be proven in the ability to resist all these threats.