The employment record in the province shows a strong rebound in the third quarter, following the easing of health restrictions and a still-fragile economy. Activity recovered to levels not seen since the last decade, signaling a notable upswing after the downturn experienced last summer.
In more detail, the latest Active Population Survey indicates about 870,300 workers in the province during the third quarter. By comparison, the September Social Security enrollment stood at 730,102. This gap translates to roughly 140,000 Alicante residents working without a formal contract or proper self-employment registration. That figure exceeds pre Covid norms by a wide margin (historical ranges typically between 100,000 and 130,000) and stands as the second largest observation in the series since 2012. It remains below the peak seen in the summer of 2016, when the difference between the two measures reached approximately 146,000 workers.
Experts caution that the figures cannot be read literally due to methodological differences. For instance, the EPA measures employment status by residence, while Social Security data reflects recruitment location. The result is that some provinces, including Madrid, report more EPA members than employed persons because workers commute from neighboring areas daily. The prevailing interpretation is that the gap largely reflects irregular or informal employment, with a substantial component tied to the underground economy.
The cross-sectional data show that pandemic-era irregular employment in the province fell to around 65,000 people. With the economy resuming normal activity, projections suggest a rapid recovery to levels well above those seen in 2019.
tourist-driven provinces
According to Hipolito Simon, a professor in the Department of Applied Economics at the University of Alicante and a labor market expert, the pattern is tied to the province’s economic structure. This makes irregular employment more likely, especially in sectors expanding and employing more flexible arrangements. In this view, provinces with the highest irregular employment include Alicante at the top, followed by Valencia with around 105,000 workers not captured in the Social Security bases, the Balearic Islands with about 58,710, and nearby regions such as Tenerife and Cadiz, each near the 50,000 mark. Proximity to large urban centers, tourism intensity, construction activity, and agricultural cycles shape these patterns. In Alicante, the shoe industry has historically shown higher informal activity, alongside tourism and construction as key contributing sectors.
There are many other activities across the country with notable irregular employment, including private tutoring, housekeeping, and caregiving. The professor also notes other possible drivers, such as reactions by some business owners to labor reforms requiring more permanent contracts, which may push firms toward informal practices as a workaround.
The general secretary of the regional UGT expresses concern about abuses in employment patterns, such as temporary contracts used to hire and release workers in the same day or after very short periods. He argues that new controls should justify temporary arrangements and that enforcement needs strengthening to curb contract abuse. He urges empowering the Labor Inspection with more resources to monitor firms, particularly small ones.
José María Ruiz Olmos, head of CC OO Employment in the region, agrees that a fragmented production landscape contributes to the informal economy. He also notes that inflation places pressure on households and can encourage shortcuts by employers. He stresses that while cost pressures exist, they cannot justify illegal practices, which distort competition and harm workers and compliant businesses alike.
Employer concerns and regulatory responses
Business groups argue that comparing EPA and Social Security figures can be misleading, given the different data collection methods. They acknowledge inflation and rising household costs as factors in the observed uptick, along with labor market rigidity. Still, they insist that this should not excuse unfair competition or permit unregulated practices. The call remains for balanced policy measures that protect workers while preserving a fair business environment.