The labor market in the Balearic Islands faces the end of the tourist season with an apparent contradiction: unemployment rose again in September for the first time in five years, while Social Security enrollment and new hires continue to show significant growth rates. The figures, therefore, paint a picture of a labor market that continues to generate jobs, although it is beginning to show some of the pressures associated with the end of the season and the changing composition of the workforce.
In September, there were 26,547 unemployed people in the islands, 493 more than a year earlier, which represents an increase of 1.9 percent. The trend was not uniform across all islands: Ibiza recorded the largest increase, at 6.5 percent, followed by Formentera, at 2.9 percent, and Mallorca, at 1.9 percent. Menorca was the exception, with an unemployment drop of 4.5 percent.
For the regional government, however, these figures must be interpreted in light of an extraordinary factor: the regularization of migrants. The regional minister of Labor, Public Function, and Social Dialogue, Catalina Cabrer, maintains that this process is already having an impact on labor statistics. In September, there were 4,806 unemployed non-EU foreigners – 49 percent more than a year earlier – and 1,102 people registered as unemployed were linked to the specific extraordinary regularization code.
The Government of the Balearic Islands therefore interprets that part of the increase in unemployment is not necessarily due to a worsening of the labor market, but rather to the inclusion in the system of people who, until now, were not registered in the same way in labor statistics. Since the beginning of the process, 1,369 job seekers have registered with the SOIB, of whom 1,102 were unemployed.
Other indicators paint a considerably more positive picture. In September, the Balearic Islands recorded 36,120 new contracts, 3,517 more than a year earlier, representing a 10.8 percent increase. In addition, 64.6 percent were permanent contracts, compared to the national average of 44.3 percent. Even more significant is the trend in Social Security enrollments. There were 682,486 people enrolled in Social Security, 29,078 more than in September of the previous year, which represents an increase of 4.5 percent. The number of self-employed workers also increased to 110,291, a 2.8 percent year-over-year increase.
It is precisely this combination—higher unemployment, but also a much larger number of people paying social security contributions—that explains much of the debate surrounding the September figures. The unemployment figures have worsened slightly, but this has not been accompanied by a corresponding loss of jobs. On the contrary, the number of people paying social security contributions continues to grow significantly.
The UGT places particular emphasis on this second reading. The union believes that the extraordinary regularization plan is having a positive impact on employment and highlights that the increase in the number of people paying social security contributions is far outpacing the rise in unemployment. Its general secretary in the Balearic Islands, Pedro Homar, also calls on companies to extend the contracts of permanent seasonal workers for as long as possible, so they can benefit from a longer tourist season.
The debate is shifting toward the quality of employment.
Trade union analysis, however, raises a question that goes beyond membership figures: what kind of jobs is the Balearic economic model creating, and to what extent does it allow workers to maintain their standard of living?
CCOO interprets the September figures as part of the usual trends seen at the end of the tourist season and considers the year-over-year increase in unemployment a cause for concern, as it sees it as part of a “stagnation” trend. The union is calling for structural measures to improve the labor market and living conditions, and directly links this issue to the housing problem.
The UGT shares some of these concerns and maintains that job growth alone does not guarantee an improvement in quality of life if access to housing remains a problem. At the same time, the union calls for the extended season to be used to keep permanent seasonal workers employed for longer.
The debate, therefore, is beginning to shift from how many jobs the Balearic Islands generate to how long those jobs last, what income they provide, and to what extent workers can maintain their standard of living.
Companies focus on inflation
From a business perspective, the outlook is more favorable regarding labor market performance. The president of the CAEB, Carmen Planas, highlights the “good health” of the Balearic labor market during the high season, despite the slight increase in unemployment, which has broken the downward trend of recent years.
The business organization, however, raises another cause for concern: inflation. Planas warns of a price increase that, he notes, has not been seen in approximately four years. This is a major problem because it could erode some of the improvement reflected in the employment figures if the increase in income does not keep pace with the rising cost of living.
September therefore presents a multi-layered economic landscape. The Balearic Islands continue to create jobs and expand their social security contributor base; hiring is growing strongly; and the proportion of permanent contracts remains above the national average. At the same time, unemployment has broken a five-year streak of declines and is rising again year-over-year, partly due to the inclusion in the system of people linked to the special regularization process.
The regional government emphasizes the strength of key indicators and the impact of regularization on the statistics. Business leaders highlight the strength of the labor market during the high season and warn of inflation. Unions, while acknowledging the growth in employment, point to the structural problems of a labor market characterized by seasonality and the difficulty of translating this quantitative improvement into a corresponding rise in living standards.
The most significant figure for September, therefore, is not just that there are more people unemployed, but that this increase coincides with nearly 29,000 more people being registered with Social Security than a year ago. The challenge in the coming months will be to determine how much of this labor market strength can be sustained once the peak of the tourist season has passed.
