Article published by José Alberto León in Diario de Avisos on 07/13/14.
The number of affiliates to Social Security (S.S.) in the month of June 2014 in the Canary Islands increased by 1,106 people compared to the previous month, and by 21,925 people if compared to the month of June 2013, reaching the figure of 664,467 affiliates. The positive data regarding job creation continues to occur, given that seasonally the first half of the year is usually negative in the Canary Islands, and despite this, jobs are created.
As the graph shows, the interannual variation in the number of Social Security affiliates in the Canary Islands in the second quarter of the year continues on an upward path and has grown by 3.1% compared to the second quarter of the previous year. After the short-lived rebound in 2011 and subsequent relapse, membership is once again at positive year-on-year rates, and these are higher than those of 2011, when the maximum year-on-year growth was barely 0.9%. We estimate that the interannual growth rate will continue to accelerate at least until the month of July, but they could begin to reduce after the summer, since the increase in tourist arrivals began to accelerate last fall and the comparison will not be as positive as at present. Even so, we will close 2014 with some 20,000 more social security affiliates than at the end of 2013, so that there will be net job creation during this year.
In Spain as a whole, affiliation data are also positive. In June 2014, 56,600 more social security affiliates were registered than in the previous month and 291,100 more than in the same month of the previous year. Where are jobs being created? Social Security data show that employment grows year-on-year in the hospitality industry (2.6%), in administrative activities (1.5%); and in commerce and social-health services, which also grew above 1%. This means that in the first half of the year the public social protection system has recovered just over half a million jobs destroyed during the years of the crisis, and has grown 1.8% compared to June 2013.
However, with the seasonally adjusted data in hand, once calendar and seasonal effects have been eliminated, the number of affiliates in June in Spain grows by only 8,720 people compared to the previous month, which indicates that most of the increase in affiliates in the month of June is seasonal, so there is no need to get too excited. Jobs are created, but the pace is not enough to get excited about.
I have already mentioned in a previous article that the affiliation data and the employed data in the Active Population Survey (EPA) have lately been somewhat contradictory. With the EPA data for the first quarter, our conclusion was that, despite the favorable affiliation data, these data were somehow “inflated” by seasonal factors, by multiple employees (which social security accounts for several times) and by the exit of some segments of the population from the underground economy due to the reduction in the cost of contributions, and that in reality employment had then been stabilized for six months, after a phase of job destruction that had lasted five years.
So the data on Social Security affiliates does not guarantee by any means that we have begun to create net employment, as it could again be due to the fact that this data was overstated for those same reasons. So be careful in your analysis. Like it or not, EPA labor market data is more serious, reliable, and rigorous than any other data we have. However, given the strength in the year-on-year growth in the number of affiliates (1.8%), we believe that, now, the Spanish economy began a lasting phase of job creation in the second quarter of 2014, although we will know this with certainty with the next EPA that will be published at the end of this month of July. With current data, it cannot yet be concluded that this phase has already begun.
