The employment record in the province shows a strong upswing in the third quarter after the setback from the epidemic. Activity rebounded from the sharp downturn, reaching one of the higher levels seen in the last decade.
In concrete terms, the latest Active Population Survey indicates 870,300 workers in the province during the third quarter, compared with the September Social Security commitment of 730,102. This implies about 140,000 Alicante residents worked without a contract or without proper self-employment registration. That figure surpasses the region’s pre Covid range of 100,000 to 130,000 and stands as the second largest in the historical series since 2012, though it remains below the peak of summer 2016 when the gap reached 146,000 people.
It is important to note that the figures cannot be read literally due to different methodologies: the EPA tracks status based on residence, while Social Security reflects where workers are registered. This means provinces like Madrid can show more EPA members than employed people because workers commute from nearby provinces daily. Experts agree that the gap between these indicators approximates the scale of irregular employment and more broadly the underground economy .
For example, the cross-section data shows irregular employment in the province at around 65,000 people during the pandemic. Activity is expected to recover quickly as normal conditions return, potentially reaching levels higher than those seen in 2019 .
Touristic provinces
According to Hipolito Simon, a professor of Applied Economics at the University of Alicante and a labor market expert, the pattern relates to the province’s economic structure. It makes irregular employment more likely, especially in sectors that experience expansion and temporary boosts in demand .
In this context, the provinces with the highest irregular employment include Alicante at the top, followed by Valencia with about 105,000 workers not included in the Social Security bases, the Balearic Islands with 58,710, and others such as Murcia, Toledo, Cádiz, and Santa Cruz de Tenerife. Proximity to major urban centers like Madrid may influence these figures in some cases. Tourism and construction, along with agriculture and, in Alicante, the footwear industry, have historically shown higher shares of informal activity.
There are many other activities across the country where irregular employment is prevalent, including private tutoring, housework, and caregiving. The UA professor also suggests that policy changes and responses to labor reform, especially regarding mandatory use of permanent contracts, could drive some of this behavior .
A warning also comes from Yolanda Diaz, general secretary of unions, who notes abuses in temporary contracts where workers are signed up and dismissed on the same day or for only a couple of hours. These abuses require stronger labor inspection and more resources. José María Ruiz Olmos, head of CC OO Employment in L’Alacantí, highlights the atomization of the productive fabric as another reason for high informality and points out the challenges unions face in reaching small firms. He also notes that inflation drives more families into desperate job searches, which can feed abuse when workers are not in a position to refuse it.
Meanwhile, attention is drawn to the need for a stronger inspection apparatus and better enforcement in order to curb abuses that harm workers and fair competition. The debate continues among employers and unions about how to balance economic flexibility with robust oversight.
Employers pressure Consell to strengthen control of underground economy
The business association CEV describes the situation as risky for the growth of the unregulated economy because EPA and Social Security figures are not strictly comparable. Nonetheless, inflation, higher household costs, financial pressure, and rigidity in the labor market are cited as factors contributing to the rise. None of these elements justifies improper behavior, and it is said that such practices create unfair competition among companies. This remains a central concern for policymakers and industry leaders alike.