The discontinuous constant: data, hoaxes and myths about their impact on unemployment figures

Beyond the conflict between the parties, the economists consulted for this report acknowledge that this contractual figure – backed by the latest labor reform – has increased. skews your stats unemploymentpreviously was not a good measure of current events. According to Rafael Doménech, head of economic analysis, research institutions such as BBVA Research have developed alternative indicators to better X-ray labor market entry, exit and persistence.

And for its part, the Department of Labor has already launched it. Procedures for parsing all information related to this type of contract and thus facilitating the task of researchers and analysts around this figure. It’s an exercise in transparency that some economists will appreciate in advance. Others, such as Carlos Martín Urriza, head of the CCOO economic cabinet, attribute this to chronic staff shortages at organizations like Sepe, who were already overwhelmed at managing delays at the start of the pandemic.

partisan dart

The debate over non-permanent contracts began in June 2022, when Spain fell out of three million registered unemployed and PP leader Alberto Núñez-Feijóo for the first time in ten years. Accuses government of “faking” data by not counting intermittent landlines as such. Conservatives criticized the Executive’s optimism about the robustness of the labor market over the past year.

It wasn’t the first time PP had questioned government statistics, this was already in September when Elvira Rodríguez, PP’s head of economy along with Pablo Casado, accused the Government of “playing the game” with growth data. of GDP.

Returning to discontinuous corrections, Feijóo’s argument is as follows: worker who is now permanent discontinuity was formerly temporary. Therefore, he was unemployed before his contract expired, he was counted as registered unemployed and reflected in the statistics. Now stationary while discontinuous and maintains the contractual bond They don’t show up in unemployment statistics even though they don’t work financially with the company—that is, they have a guarantee that they’ll call them again or have to compensate them if they don’t.

“This is not a new discussion, we have already lived with procrastinators who were not considered unemployed despite being inactive during the pandemic,” says BBVA’s Doménech.

uncertain origin

They gave the following response from the government: the method of counting whether a discontinuous fix has been officially discontinued has not changed, something the four economists consulted for this report agree on. However, Fedea researcher Florentino Felgueroso denies that the methodology for counting intermittent landlines has been stipulated since 11 March 1985, as claimed by the Government, because the intermittent landline figure is not clearly visible in the ministerial order in question. “The definitive document on which it was established [cómo computan] I couldn’t find it and I don’t know if anyone knows. Its origin is between 1985 and 1998.“, invoice.

Beyond the source of the methodology, key to the debate is whether the proliferation of such contracts distorts unemployment data. All the economists consulted here agree that: registered unemployment has never been a reliable indicatorin fact, it doesn’t even meet the statistical requirements of the International Labor Organization (ILO).

And this is administrative data, underestimates the total number unemployed So all the unemployed are unemployed, but not all of the unemployed are on the Sepe list. These are essentially people who are not eligible for assistance and are not listed unless they have incentives to go through the not always easy process of making an appointment and registering.

This is why INE’s active population survey (EPA) always shows more unemployed than registered in Sepe, and economists recommend that to track the month-to-month development of the labor market: it’s best to look at membership stats Social Security. That is, how many employees are active and contributing.

And in these statistics, the intermittent landlines only calculate when they are in operation, which prevents those that do not break the statistics. “The only relevant indicator is commitment,” insists Sergi Jiménez, a professor in UPF’s economics and business department.

Are all perpetual contracts perpetual discontinuity?

Beyond the unemployment statistics, another argument that arises in connection with the discontinuous constant is that Unprecedented increase in perpetual contracts this path is what Feijóo christened “vague instability.” How much do perpetual agreements weigh in total of all perpetual agreements signed?

In 2022, 7.02 million permanent contracts were signed, of which 54% were full-time. and the rest, at a very similar rate, were either part-time or permanently discontinuous. In other words, this figure represents only a quarter of all permanent contracts signed in the first year of the labor reform, which increased by 232 percent compared to the previous year. “It’s about keeping the radishes by their leaves to avoid talking about the wonderful thing that reform has worked,” says the executive of the CCOO economic cabinet.

transparency criticism

“At the moment, registered unemployment statistics are not as transparent and informative as we would like,” says Rafael Doménech, head of economic analysis at BBVA Research. “We need you to give us more informationespecially after seeing movements in how statistics are becoming regular, affecting more than 100,000 workers in just a few months,” he adds.

The economist cites data from October 2022, when he changed the counting criteria to rank the statistics and did not report it. This had a clear impact on the statistics: October coincided with the biggest drop in unemployment in the tenth month of the year, a month when unemployment rose for mostly seasonal reasons. “Thanks to the labor reform, the effects of a hitherto obvious impermanence have been softened.”, the Ministry of Labor defended in a press release.

“When we talk about transparency, we’re talking about communicating things like that,” says Fedea’s Felgueroso. “The government doesn’t take criticism very well, and all researchers want is more and better information,” says UPF professor Sergi Jiménez.