Published on Friday, June 12, 2020

Spain | Rebuilding the Labor Market After COVID-19

The COVID-19 crisis has brought the weaknesses of the Spanish labor market to light once again and it may have a permanent impact on the labor market. Avoiding such a situation must be one of the objectives of the Parliamentary Commission for Social and Economic Reconstruction.

Key points

  • Key points:
  • It is estimated that the impact of the crisis took the number of Social Security contributors in unemployment to 1.29 million as of the end of May, with 3 million employees placed on a Temporary Redundancy Plan (ERTE) and 1.5 million self-employed workers having ceased operations.
  • Spain has a greater productive capacity and a better productive structure than 80% of the world's countries, yet its unemployment rate is over double that of those other economies.
  • Spain combines high severance pay for permanent employees compared to other advanced economies with, most significantly, a more inefficient but flexible approach with respect to temporary employment.
  • In order to harness the opportunities presented by digital transformation, appropriate measures will need to be taken to enhance digital education and skills; active policies, passive policies, and regulations concerning the labor market and the goods and services markets, in order to make them more competitive; welfare, equal opportunities and redistribution.



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