Unemployment is one of the main variables which immediately links the economy to the social situation. According to the data that the INE publishes, quarterly or monthly, combined with the number of people covered by redundancy and unemployment recorded in the IEFP, there are already very visible effects, with notable impacts, but there are, however, a very large part still statistically submerged.
He is overwhelmed for several reasons. It will only really appear in the coming months, when changes in extraordinary social support are created, some ended in October. They will not become more evident until March, the bank default deadline.
Unemployment would fall normally in spring-summer. For agriculture, tourism, holiday consumption. The comparisons must then be viewed in a homologous way.
The INE, with recent data for the second quarter, “strangely” told us that unemployment had fallen by 50,100 people. These data are average, at three months, and correspond to the start of the pandemic. However, if we see them in the monthly variations, month after month, they are more and more negative. Between May and June, for example, the last month of this quarter, the unemployed increased by 53.8 thousand (over 18.9%). The monthly increase was therefore noticeable, whereas it would normally decrease.
However, it is important to supplement this point of the visible with anomalous statistical data, from the abnormal periods in which we live.
However, on a year-over-year basis, employment fell by 185,000 people. Why then have they not gone statistically unemployed, if this figure has even fallen? Why did the unemployed not look for a job or were they not available for work? The reason was the containment and the realistic expectations of not getting it.
Unemployment is falling, but there is a statistical reason: the inactive population is increasing
Thus, those who are no longer employed have become inactive rather than unemployed. Others, among those who were already unemployed, ceased to be statistically unemployed, having also been inactive. The inactive population has consequently increased by 259,100 people, of which around 143,900 are available for work, but not looking for work.
In addition, of the 4.731 million who remained employed, more than one million (1.08) were absent from work, of which 680.1 thousand were on layoff, a figure four times higher than in the same period. last year. Hours worked in turn fell by more than 26%.
This is the only way to realize that although there is much more unemployment, the unemployment rate has gone down. The huge negative friction in the labor market is however worrying.
Some of these invisible unemployed may be affected by the labor underutilization indicator, which increased by 116,100 people in June. This underutilization reached 14.8% this month, 2.3pp more than last year. This more comprehensive indicator still does not include employees without a job, in companies that have been shut down or with a strong reduction in activity (dismissal for example), nor those who are inactive and who have neither sought nor willing to work in the face of confinement.
This phenomenon of discouragement is evident among young people. In the absence of new jobs or international mobility, these are the ones who suffer the most. In this segment, there are 62,300 more inactive and 56,900 fewer employed. Young people known as “neem” (neither jobs, nor school, nor training) increased by 92,300 people.
These hundreds of thousands, measured in June, with the latest data from the INE, abnormal, in abnormal time, therefore indicate a high social risk. Another two hundred thousand, three hundred thousand, four hundred thousand? In the coming months, we’ll see.
Institutions and society must therefore be prepared for what is coming. The calls that have been made, including by government officials, are very realistic
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Month after month, the drama manifests itself more. The freeze on public support is melting. In July, the IEFP said there were more than 110,000 registered unemployed. Never in 30 years, in May, has there been a monthly increase in registered unemployment. Since February, at a time that should have been low, registered unemployment has increased by more than 90,000 people.
The INE also informed us that GDP fell by 16.3% in the second quarter, compared to 2.3% in the first. Tourism had less than 81.7% of visitors at the end of the first semester, or more exactly 96% less “foreigners” and 59.8% less residents. These two indicators are enough for us to understand what is happening.
Institutions and society must therefore be prepared for what is coming. Proactive public policies, a united and conscious society and a very strategic pragmatism. The calls that have been made, including by government officials, are very realistic.