Paralyzed' Spain hemorrhages jobs since coronavirus lockdown

Belén Carreño and Emma Pinedo, Reuters

Posted at Apr 02 2020 09:01 PM

Spanish wedding dress designer Inma Garcia poses inside her shop during the coronavirus disease (COVID-19) outbreak, in Barcelona, Spain March 27, 2020. Picture taken March 27, 2020. Nacho Doce, Reuters

MADRID - Spain has shed 900,000 jobs since it went into lockdown to fight the coronavirus, a drop documented over less than three weeks that lays bare the unprecedented scale of the outbreak's economic impact.

Spain, which has the world's second-highest death toll from the epidemic after Italy, has since March 14 allowed residents to leave their homes only for essential trips. This week it tightened the lockdown, with only employees in key sectors permitted to travel to and from work.

Social security data showed 898,822 Spaniards - including 613,000 fixed-term workers - had lost their jobs since the lockdown started.

Labor Minister Yolanda Diaz said that figure did not include temporary layoffs affecting at least a further 620,000, and tens of thousands more are on sick leave.

"This is an absolutely unprecedented situation," she told a news conference.

Spain has suffered from chronically high joblessness in its recent past, not least in the aftermath of the 2008/9 financial crisis when the unemployment rate rose to just under 27 percent.

Some 900,000 jobs were also lost at the peak of that crisis, but that happened over 20 weeks, Social Security Minister Jose Luis Escriva said.

Thursday's data is some of the first globally to spell out the extent of the lockdown's impact on the labor market.

With all hotels, restaurants and bars shut, the tourism sector has been hardest hit, along with construction.


Not all job losses were accounted for in separate data showing the number of officially registered as unemployed rose over 9 percent to 3.5 million in March, the highest level since April 2017. Some of those who lost their job had not been registered yet and others don't have the right to unemployment benefits.

Meanwhile, many companies in other sectors, including car plants and other major businesses, have implemented "ERTE" temporary layoffs, under which companies that face financial difficulties can temporarily suspend a worker's contract.

ERTE applications take five days to process, suggesting Diaz's figure of 620,000 will rise.

"The country is practically paralyzed as a result of the health emergency," Unai Sordo, the leader of Spain's biggest labor union CCOO, told broadcaster TVE.

March is usually a good month for employment in Spain because it marks the start of the holiday season, with many temporary workers finding jobs in particular in the hospitality sector.

"The destruction of jobs is extraordinarily heavy for women, young people and the most precarious work sectors," Pepe Álvarez, leader of the UGT union, Spain's second-biggest union told RNE radio.

The social security data also showed that around 80,000 workers are off sick with confirmed coronavirus, while another 170,000 are also on sick leave because they are isolated after coming into contact with someone with the virus.

Transport Minister Jose Luis Abalos told RNE radio: "We will have to work on relaunching the economy once we can get control of the epidemic."

(Reporting by Inti Landauro, Belen Carreno, Emma Pinedo Writing by Ingrid Melander and Andrei Khalip Editing by Gareth Jones and John Stonestreet)