Unemployment increases in the sector at the same time that enrollment grows in July

While hotel business owners regret not finding workers for the tourist season, unemployment in the sector grew in Catalonia in July compared to June.

Thomas Osborne
Thomas Osborne
15 August 2022 Monday 00:52
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Unemployment increases in the sector at the same time that enrollment grows in July

While hotel business owners regret not finding workers for the tourist season, unemployment in the sector grew in Catalonia in July compared to June. It was an anecdotal increase (209 more employees, 0.7% growth) but the important thing is the change in trend and the context in which it occurs, of complaints from employers due to lack of manpower, especially in Catalonia.

The increase in the number of unemployed in the hotel industry in the midst of the tourist campaign occurred in parallel with a strong growth in enrollment that exceeds the figures registered in the months of July before the pandemic. There were 12,713 more affiliates than in June, 4.4% more.

This double effect of rising unemployment and affiliation in the most dynamic sector in summer in Catalonia is the result of several factors, reflects the UAB Professor of Applied Economics Josep Oliver. The first is that it shows an increase in the active population, in the population entering the labor market. “Tourism often involves people who weren't in the job market before,” says Oliver. The economist adds that the growth in affiliation may also be due to the fact that the labor reform has made employment emerge in the sector that was previously in the submerged economy. For example, the reform had a dissuasive effect on the restoration at the Seville Fair.

Finally, Oliver points out that "we are at an aggregate unemployment rate that in some areas could be understood as technical unemployment." The number of registered unemployed in July was 31,446. This is the lowest figure in the last six years. The economist points out that it is possible that unemployed workers in the hotel industry do not reside near the large hiring centers in summer, such as the coast, and geographical mobility is not possible.

In Spain as a whole, unemployment in the hospitality sector did not rise in July in relation to June, but instead fell by 2,638. It is less than what it did in July 2019, before the pandemic broke out, when it fell by 4,188 employees. In Spain as a whole, the weight of the tourism sector is not as important as in Catalonia.

Meanwhile, the problem of the lack of workers continues to be closely linked to the working conditions offered, with contract wages frozen for two years and almost general non-compliance with the aforementioned contract. The salary tables of the Catalan hospitality agreement set annual salaries of 18,821 euros per year for a waiter in a bar in Tarragona, for example.

Earlier this month, the UGT union signed a three-year Catalan contract agreement that provided for wage increases of 4% this year, 3% next year and 2% in 2024 without a review clause. CC.OO. The signing of the pre-agreement must still be ratified in assembly. Paco Galván, from the CC.OO. hospitality sector, points out that his initial proposal was not 9% for three years of the pre-agreement, but 11.5% with a review clause. Taking into account the two years of freezing and the expected inflation for this year, in both cases there would be a loss of purchasing power. That is why there are employers (see attached information) who have chosen to raise wages above the agreement to attract labor.

Galván points out that Catalonia's hospitality agreement is not one of the worst. "The problem is that it is not fulfilled," he laments. Igor Abascal, from the hotel and restaurant sector of UGT Catalunya, adds that if employers offered contracts for 40 hours a week and not 60 or 70 hours, "they wouldn't have so many problems" to fill the positions.

Another explanation for the lack of labor lies in the demographic drop in the group of young people who traditionally filled the positions on the coast. In 2000 there were 9.3 million people between the ages of 15 and 29 in Spain, while last year there were only 7.3 million. Two million young people have vanished. Since 1995, the drop in young people (16-34 years) in the working-age population (16-66 years) was even greater: 21%.