THE job retention scheme is exaggerating the downturn in the labour market, according to the Employment Secretary. 

According to data released Tuesday by the Spanish Labour Ministry the pandemic saw a 23% increase in unemployment in 2020 but  a news conference today (Tuesday, January 5) 

Joaquin Perez Rey estimated that the true unemployment rate in Spain in 2020 was likely below 16%. 

Rey warned that data collected was ‘a bad figure full of anomalies’ due to miscalculations over the number of people relying on social protections due to COVID-19. 

Numbers Spanish Labour Ministry suggest that the number of unemployed people had increased by 724,532 to 3,888,137, compared to the previous year but Rey warned the true proportion of people losing their jobs was inflated due to miscalculations. 

This is because those requesting social protections have had to do so technically as job seekers at the same time local authorities chose to renew job retention schemes automatically in order to avoid crowds at job centres and local official offices.

“These administrative aspects explain the discrepancies between the path of affiliation and registered unemployment,” Rey said.

Employment losses are broadly unchanged since the initial job cuts in April and March thanks to the roll out of the job retention schemes. 

Meanwhile Pensions and Security Secretary Israel Arroyo said the start of the year was not expected to see the usual dips in employment figures because the scarcity of work meant short term contracts that typically end in January were not offered to workers in the first place. 

It comes as the labour ministry said the number of people registered as out of work had risen to 3.89 million in 2020, the first increase since 2013, as a result of the business restrictions imposed to curb the spread of the virus.

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