This Independent Financial Responsibility Authority (AIReF) warned this Wednesday that the official unemployment rate is a poor representation of the broader labor reality, notably because it omits part-time workers seeking more hours and those who are unemployed but want to work yet are not registered. In practice, this means the traditional unemployment metric misses meaningful portions of the labor force and can mislead policy analysis (AIReF briefing, 2024).
One alternative measure is the share of the population considered “underutilized.” Spain, for example, includes part-time workers who want full-time work and unemployed individuals who are not officially registered but wish to work. This underutilization rate reaches around 18%, sometimes labeled as the “discouraged” share by analysts (AIReF discussion, 2024).
The independent agency notes difficulties in tracking actual hours worked given shifts in labor-market behavior since the reform. It also points to several other measures already used across Europe and the United States to capture a changing global labor market more accurately. In today’s volatile environment, AIReF argues for higher-frequency data to gauge the evolution of the economy and the behavioral shifts within the labor market (AIReF briefing, 2024).
March will be “exceptional” in membership
The organization deems the mid-month data from Social Security on membership trends to be highly informative. According to AIReF, the latest statistics suggest March will be extraordinary, underscoring the ongoing need to monitor labor-market dynamics (AIReF commentary, 2024).
Still, AIReF believes more effort is needed to measure hours worked accurately. The changes in labor-market behavior post-reform create challenges for gauging actual employment time and underscore the importance of refining measurement methods (AIReF briefing, 2024).
Additionally, there is substantial uncertainty about how much information is being incorporated into GDP statistics and how updates are affected by revisions. The report calls for clearer communication of progress and the drivers behind revised data (AIReF report, 2024).
National eligibility
AIReF routinely offers recommendations to various public administrations aimed at improving the efficiency and transparency of the system. Alongside periodic reports, the institution plans to publish an observatory of recommendations for ongoing monitoring in the near future (AIReF notes, 2024).
A recurring topic concerns European funds such as Next Generation EU. AIReF contends that this data should be presented from a national accounting perspective. The head of AIReF, during a Budget Committee appearance, criticized gaps in national-accounting information and the absence of a unified approach to reporting or implementing the Recovery Plan (AIReF remarks, 2024).
The implementation of the Recovery Plan, including Brussels’ payments, is assessed by milestones and payout targets. Managerial reports detail how well these milestones have been met, and AIReF notes that the pace of implementation remains favorable (AIReF evaluation, 2024).
From a budgeting angle, the analysis can extend to month-to-month spending. The agency cautions that much of the Recovery Plan is carried out by other administrations, highlighting the need to publish national-accounting data to present a complete view of fund deployment (AIReF overview, 2024).
Transparency in the public sector
Despite notable progress in recent years, AIReF president Cristina Herrero emphasized at a conference hosted by the Association of Economic Information Journalists (APIE) and AIReF that transparency standards in the public sector still require raising. The aim is to ensure information access remains robust and reliable (AIReF address, 2024).
Herrero noted that after nearly a decade, access to information is broadly guaranteed, though some areas for improvement persist. While AIReF has not secured formal signing with the Ministry of Economy or the Ministry of Finance, it has pursued Memorandums of Understanding with various bodies. The institution has also sought collaborations with regional administrations to assess programs like the Minimum Living Income (IMV) and to maintain a regular update cycle (AIReF briefing, 2024).