Little is said about the fear of losing a job, but it is a deeply rooted emotion among Spaniards, so much so that it is even used as an economic variable to measure consumption and even predict recessions. The good news is that in the last two years this fear has been decreasing and it has done so with special intensity among vulnerable workers, who are those with the lowest income and young people. The result not only allows many people to sleep better, but is also encouraging economic activity, as recognized by the Bank of Spain.
Dismissal phobia – there is still no coined term – is the order of the day in one of the EU countries with the highest unemployment rate. ECB surveys placed Spain at the beginning of 2021 as the large economy with the greatest fear among its workers of losing their jobs within three months. Spanish workers gave themselves an 18% probability of being left without a job, when in Germany or the Netherlands the percentage was around 8%. In the last wave of 2023, the Spanish suddenly appear calmer, with rates of 12%, while the Germans and the Dutch have barely changed their sentiment.
The Bank of Spain goes further and has just refined the data up to March to reach a conclusion: after the pandemic the labor market has shown “remarkable dynamism”, which has lowered the “perceived probability of losing employment”, a circumstance which in turn is reducing savings “for precautionary reasons” and “raising household spending levels.”
The labor reform and the greater weight of permanent contracts have contributed to this trend, according to the author of the Bank of Spain report, Carmen Martínez-Carrascal. “Since the end of 2021, the reduction in unemployment has also been accompanied by an increase in the proportion of wage earners with an indefinite contract, a development that would have been boosted by the latest labor reform,” she says. The groups that reduce their fear the most are those with a “higher incidence of temporary hiring,” she adds. INE calculations show that temporary employment has gone from 26% to 17% in two years.
The latest data from the EPA also contributes to lowering the bad omens. More than 600,000 people entered the labor market in the second quarter of the year, bringing the number of workers to over 21 million for the first time. The unemployment rate has fallen from 13.3% to 11.6%, the lowest level in fifteen years.
The biggest concern continues with low incomes, whose perceived probability of losing their job is 18.8%, compared to 9.2% for the population quintile with the highest income. However, in the last two years, the percentage among high incomes has hardly changed, while among low incomes it has fallen sharply, from almost 32% in January 2021.
The differences by age and sex have also narrowed. The risk of losing a job among those under 35 years of age is 14.5%, compared to 11% among those between 55 and 70 years of age. Of course, the fear of young people has fallen by nearly ten percentage points in just two years. Two years ago the rate was 21% for working women and 15% for men, a percentage that now stands at 14% for women and 12% for men.
The Bank of Spain considers that the loss of this fear is transferred above all to a greater increase in the consumption of durable goods. In macroeconomic terms, it explains the 0.7 point increase in consumption in Spain of these products.
Another consequence is lower “precautionary savings”. The decrease in fear reduces the tendency to save and “provides support for household spending,” says Martínez-Carrascal.