Unemployment in Spain Falls to Lowest Level Since 2009 — Who Is Still Unemployed?
Spain has reached its lowest unemployment rate in 17 years, marking a major milestone for the country’s labor market and reinforcing the narrative of a resilient post-pandemic recovery. According to the latest labor force data, Spain’s jobless rate has fallen to levels not seen since before the global financial crisis, driven by strong job creation, record-high employment, and structural changes in the labor market.
However, despite this historic improvement, unemployment remains unevenly distributed across age groups, regions, and sectors, highlighting persistent challenges beneath the headline figures.
A Historic Decline in Unemployment
The latest figures show that Spain’s unemployment rate has dropped to around 11.5%, the lowest since 2009, when the economy was still reeling from the aftermath of the housing bubble and the global recession. Total employment has climbed to more than 21 million workers, setting a new all-time high.
This progress reflects several converging factors:
- Strong economic growth, supported by tourism, services, and exports
- Labor market reforms that have reduced temporary employment
- EU recovery funds, which have boosted investment and job creation
- Improved job stability, with a sharp rise in permanent contracts
Since the labor reform introduced in 2022, Spain has seen a dramatic shift away from short-term contracts toward open-ended employment. Permanent contracts now account for nearly 45% of all new hires, compared with less than 10% before the reform, significantly reducing job insecurity.
What’s Driving Job Creation?
Job growth has been particularly strong in tourism, hospitality, construction, logistics, and professional services. Spain’s tourism sector continues to break records, benefiting from strong international demand, while public and private investment linked to digitalization and green projects has supported employment in construction and engineering.
The services sector remains the backbone of job creation, accounting for more than 70% of new employment over the past year. Meanwhile, industrial employment has stabilized after years of decline, helped by export demand and energy-related investments.
Another key factor has been the resilience of small and medium-sized enterprises (SMEs), which make up the bulk of Spain’s labor market and have been major beneficiaries of EU-funded programs.
Who Is Still Unemployed?
Despite the positive trend, unemployment in Spain remains structurally high compared with other European economies, and several groups continue to face disproportionate challenges.
Youth Unemployment
Young people remain the most affected. While youth unemployment has declined, it still stands at around 25%, more than double the national average. Many young workers struggle to access stable, well-paid jobs and remain concentrated in seasonal or lower-productivity sectors.
Long-Term Unemployed
More than 40% of unemployed individuals have been out of work for over a year. Long-term unemployment remains a critical issue, particularly for workers over 50, who often face difficulties re-entering the labor market due to skills mismatches or age discrimination.
Regional Disparities
Unemployment rates vary widely across Spain. Regions such as Andalusia, Extremadura, and the Canary Islands continue to post jobless rates well above the national average, while Madrid, the Basque Country, and Navarra enjoy significantly lower unemployment thanks to more diversified and higher-productivity economies.
Low-Skilled Workers
Workers with lower levels of education are still over-represented among the unemployed. While high-skill and digital jobs are expanding, reskilling and training programs have not yet fully closed the gap for workers displaced from traditional industries.
Quality of Employment Under Scrutiny
While employment levels are at record highs, economists warn that job quality remains a key issue. Many new jobs are concentrated in lower-wage sectors such as hospitality and retail, where productivity growth is limited.
Inflation has also eroded purchasing power in recent years, meaning that for some workers, higher employment does not necessarily translate into stronger real income growth. As a result, the debate is increasingly shifting from job quantity to job quality, wages, and productivity.
How Spain Compares With Europe
Spain’s unemployment rate, though improved, remains one of the highest in the European Union. Countries such as Germany, the Netherlands, and Poland continue to post jobless rates below 5%, underscoring the structural nature of Spain’s labor market challenges.
However, Spain is also one of the EU countries that has seen the fastest improvement in employment since the pandemic, narrowing the gap with its European peers and outperforming expectations from just a few years ago.
What Comes Next for Spain’s Labor Market?
Looking ahead, economists expect unemployment to continue declining gradually, supported by economic growth and ongoing investment. However, the pace of improvement may slow as the labor market tightens and global economic uncertainty increases.
Key priorities for the coming years include:
- Reducing youth and long-term unemployment
- Improving worker productivity and wages
- Expanding training and reskilling programs
- Addressing regional imbalances
Conclusion
Spain’s lowest unemployment rate since 2009 marks a significant achievement and signals a labor market that is stronger and more resilient than it has been in over a decade. Yet the data also reveal lingering inequalities and structural weaknesses that continue to leave parts of the population behind.
The challenge now is not only to create more jobs, but to ensure that growth translates into stable, well-paid, and inclusive employment — turning today’s historic figures into long-term economic strength.
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