Coronavirus lockdown destroys jobs at record pace in 'paralysed' Spain

MADRID (Reuters) - Spain has shed jobs at a record pace since it went into lockdown to fight the coronavirus, social security data showed on Thursday, laying bare the scale of the epidemic’s impact in the euro zone’s fourth-largest economy.

FILE PHOTO: General view shows an almost deserted Paseo de la Castellana street during the coronavirus disease (COVID-19) outbreak in Madrid Spain, March 24, 2020. REUTERS/Sergio Perez

Some 900,000 workers have lost their job since mid-March, with those on short-term contracts in tourism or construction among the hardest hit. At least another 620,000 have seen their contracts suspended with temporary layoffs and tens of thousands are on sick leave.

“The data is extraordinary, it’s unprecedented,” Social Security Minister Jose Luis Escriva told a news conference. “It reflects a real disruption to normal activity.”

Spain, which has the world’s second-highest death toll from the epidemic after Italy with 10,003 fatalities as of Wednesday, has allowed citizens to leave home since March 14 for essential trips only.

This week, Spain tightened the lockdown further, with only employees in key sectors permitted to travel to and from work. Streets are empty, and hotels, restaurants and bars are closed.

Some 900,000 jobs were also lost at the peak of the 2008/9 financial crisis, but that happened over 20 weeks rather than under three weeks now with the coronavirus, Escriva said.

Thursday’s data is some of the first globally to reveal the lockdown’s impact on the labour market.

Jobless numbers for March, also published on Thursday, showed Spain registered its highest monthly increase ever, with a 9.3% jump from the previous month bringing the total number of unemployed people to around 3.5 million.

The jobless data does not even reflect the full extent of the job losses, since some of those who lost their work had not been registered yet and others don’t have the right to unemployment benefits.

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“The country is practically paralysed as a result of the health emergency,” Unai Sordo, the leader of Spain’s biggest labour union CCOO, told broadcaster TVE.

Looking at the social security data in more detail, 898,822 Spaniards - including 613,000 fixed-term workers - lost their jobs since the lockdown started.

Meanwhile, many companies, from car plants to fast-food chains, have implemented “ERTE” temporary layoffs, under which companies that face financial difficulties can temporarily suspend a worker’s contract.

ERTE applications take five days to process, suggesting the figure of 620,000 will rise.

The CEOE employers’ group said those temporary layoff schemes had contained the rise in unemployment, and called for relaxed rules introduced because of the coronavirus to be extended when the lockdown ends.

“It is crucial to relax the use of ERTES... in order to facilitate the recovery of sectors such as tourism or industry, which will be gradual, thus avoiding serious and lasting consequences for employment,” it said in a statement.

March is usually a good month for employment in Spain because it marks the start of the holiday season, with many temporary workers finding jobs in the hospitality sector.

“We will have to work on relaunching the economy once we can get control of the epidemic,” Transport Minister Jose Luis Abalos told RNE radio.

The social security data showed that around 80,000 workers are off sick with confirmed coronavirus, while another 170,000 are on sick leave because they are isolated after coming into contact with someone with the virus.

Reporting by Inti Landauro, Belen Carreno, Emma Pinedo; Writing by Ingrid Melander and Andrei Khalip; Editing by Gareth Jones and John Stonestreet