Little is said about the fear of losing one's 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 falling, and it has fallen with particular intensity among vulnerable workers, who are those with lower incomes and young people. The result not only allows many people to sleep better, but also encourages economic activity, as recognized by the Bank of Spain.
Dismissal phobia – there is no coined term yet – is up to date in one of the EU countries with the highest unemployment rate. The ECB surveys placed Spain at the beginning of 2021 as the major economy with the greatest fear among workers of losing their job within three months. Spanish workers attributed an average probability of 18% of being out of a job, when in Germany or the Netherlands the percentage was close to 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 "probability of losing your job perceived", a circumstance that in turn reduces savings "for precautionary reasons" and "household expenditure levels rise".
The labor reform and the greater weight of indefinite contracts, according to the author of the Bank of Spain report, Carmen Martínez-Carrascal, has contributed to the trend. "From the end of 2021, the reduction in unemployment has also been accompanied by an increase in the proportion of employees with indefinite contracts, a development that would have been boosted by the latest labor reform", he says. The groups that most reduce fear are those that have "the most incidence of temporary employment", he adds. Temporary employment has gone from 26% to 17% in two years, according to the INE.
The latest data from the EPA also helps to lower the bad omens. More than 600,000 people joined 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 three years.
The greatest concern remains among the lowest incomes, among whom the perceived probability of losing their job is 18.8%, compared to 9.2% of the population quintile with the highest income. However, in the last two years the percentage among high incomes has barely changed, while among low incomes it has fallen sharply, from almost 32% in January 2021.
Differences by age and sex have also narrowed. The risk of losing a job among those under 35 is 14.5%, compared to 11% among those aged between 55 and 70. 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 is now 14% for women and 12% for men.
The Bank of Spain considers that the loss of fear is mainly transferred to a greater increase in the consumption of durable goods. In macroeconomic terms, it accounts for 0.7 points of the increase in consumption in Spain of these products.
Another consequence is less "precautionary savings". The decline in fear reduces the tendency to save and "provides support for household spending", says the report.
