The situation in Europe
The performance of the Spanish labour market shows significant differences compared to that of other European Union Member States. In particular, there are marked differences compared to Eurozone countries. The most important differences lie in the difficulties facing the Spanish labour force in finding employment, this especially affects younger people, which makes Spain the country with the highest number of unemployed people and employed people with an insufficient number of hours worked (underemployed). In other words, it is the country with the highest number of people needing to increase their working hours. Additionally, those in the labour force with more chance of being unemployed or underemployed are concentrated more in some households than in others, which implies that we also have the largest number of workers who live in households in which family income is below the poverty line.
Two of the main reasons for the differences between the labour markets in European countries are the different productive structures and the labour policies implemented, both active and passive. All this affects the three key dimensions of the labour market: having a job, appropriate working conditions and adequate salary.
Two key indicators have been chosen in the challenge of having a job. The first measures the scale of time-related underemployment, and the second measures the duration of the unemployment. The first key feature is that Spain ranks among the lowest positions in both indicators, second only to Greece in terms of the duration of the unemployment. In 2005, with very low unemployment levels and strong economic growth, the Spanish position in the ranking was noticeably better, both as regards underemployment and the duration of the unemployment. Spain was in an intermediate position between the Nordic and Central European countries and Eastern European countries, with the latter being in worse positions than Spain.
The chosen indicator for the challenge of having appropriate working conditions is general dissatisfaction with the job. In this case, Spain’s position in the ranking also worsened between 2005 and 2015, ending up among the bottom four EU countries in this area. Essentially, one in five Spanish workers is very dissatisfied or dissatisfied with the working conditions of their job, whereas the normal level in the EU is around one in eight or ten workers.
The analysis is completed by comparing the need for an adequate salary in the different EU countries. Two indicators have been chosen for this: salary inequality, which is the percentage of workers whose hourly wages are below a threshold that depends on the (relative) salary distribution of each country, and the percentage of workers who suffer in-work poverty, meaning employed people who live in a household in which family income is below the poverty line.
As we know, Spain ranks in an intermediate position in the European context as regards the number of people whose hourly wage is low, and during the recession its position worsened only slightly. However, both before and after the crisis Spain was at the bottom of the rankings in terms of in-work poverty, mainly due to the increase in time-related underemployment, involuntary part time hours and the increase in the concentration of unemployment and underemployment in certain households.
1. Summary of Spain’s position in the ranking of social needs in relation to the labour market in the EU.