3.1. Employment and unemployment

Total and female employment rates in the Basque Country have shown positive growth in recent years, but there is still margin for improvement

Employment indicators have been trending positively in recent years, with a steady rise in both total and female employment rates (see Graph 2). The latter is lower than the total, but close to the European average. However, in both cases there is room for improvement. Values for the Basque Country, although higher than those for Spain, are lower than those of Germany and the comparable regions, and in the case of total employment, the European average. As a result, in Table 4 we can see that the Basque Country continues to rank in the middle in comparison with the European regions, low in comparison with the comparable regions, and middle-to-high in comparison with Spanish autonomous communities and cities.

Tabla 4. Status of the Basque Country in terms of employment and unemployment indicators
Table 4. Status of the Basque Country in terms of employment and unemployment indicators. Employment rate
Table 4. Status of the Basque Country in terms of employment and unemployment indicators. Female employment rate
Table 4. Status of the Basque Country in terms of employment and unemployment indicators. Unemployment rate
Table 4. Status of the Basque Country in terms of employment and unemployment indicators. Youth unemployment rate
Source:  Eustat (Basque Statistics Office), Eurostat. Compiled by authors.
NB:  Except when no data were available, the rankings have been compiled based on 218 European regions (in blue), the Basque Country and the group of 30 comparable regions (in green), and the 19 Spanish autonomous communities and cities (in red).
Graph 2. Variation in employment and unemployment indicators
Graph 2. Variation in employment and unemployment indicators. Employment rate
Graph 2. Variation in employment and unemployment indicators. Female employment rate
Graph 2. Variation in employment and unemployment indicators. Unemployment rate
Graph 2. Variation in employment and unemployment indicators. Youth unemployment rate
Gráfico 2. Variation in employment and unemployment indicators. Legend
Source: Eustat (Basque Statistics Office), Eurostat. Compiled by authors.

Higher employment depends both on increasing the labour force participation rate and on growing the percentage of the labour force in work. For this reason, it is of interest to analyse what is happening with unemployment rates. We present both the total unemployment rate and that which affects the youngest group of people, between the ages of 15 and 24 (which is almost double that of the population as a whole). In both cases, the Basque Country ranks low and even middle-to-low in comparison with European regions, low in the ranking with comparable regions, but in a good position within Spain. This is despite the fact that unemployment rates have been declining in recent years, although less sharply than in previous years.

Despite the fact that unemployment rates have been declining in recent years, the Basque Country ranks low in comparison with Europe

Another segment of the population which receives less attention is persons over the age of 55, despite the fact that demographic pressure is making it increasingly more necessary for them to continue to hold jobs. However, they may have difficulty finding employment should they lose it. To give an understanding of the comparative position of this cohort of the population, Graph 3 shows labour force participation and unemployment rates. The blue lines on the graph represent the EU-28 average and we can thus see that the Basque Country has a combination of higher-than-average unemployment rates and lower labour force participation rates. Therefore, it is also necessary to focus on this group in order to prevent them from leaving the labour market and make it possible for them to remain employed in positions suited to their capabilities.

Graph 3. Labour force participation and unemployment rates (aged 55–64), (%, 2018)
Graph 3.  Labour force participation and unemployment rates (aged 55–64), (%, 2018)
Source: Eurostat

And although it is important to create jobs, it is also necessary to analyse their quality. In this regard, Graph 4 shows trends in three indicators which measure job quality in the Basque Country, and in comparison with the EU-28 average, Spain and Germany. The first graph measures the percentage of self-employed persons (business owners without employees or independent workers) and people who work in family businesses or firms within the working population. In both cases, these people’s employment conditions are not usually comparable to those of employees. Thus, for example, García Perea and Román (2019) point out that despite the introduction of the ‘flat rate for self-employed workers’ in payment of Social Security contributions, independent workers continue to lack the level of social protection generally enjoyed by employees. These authors likewise make reference to the fact that the percentage of workers who are not employees that choose to be own-account workers due to a lack of options is 26% in Spain, a figure which is higher only in three other EU countries.

Job quality in the Basque Country did not improve during the period of recovery from the crisis

In Graph 4 we can see a drop in the percentage of self-employed persons at the start of the crisis, as firms probably made a greater effort to retain internal employees, marking the beginning of the downturn in subcontracting of self-employed persons. However, in 2012 and 2013 there was a significant upturn in this indicator in both Spain and the Basque Country. This is because large companies turn to this resource when they have to downsize their employee positions, which then account for a smaller share of the total. When business activity and jobs begin to recover, employee positions (the option preferred by workers) begin to rise again and self-employed numbers stop growing. As a result, percentages having fallen back to 2010 levels. Levels in the Basque Country are below the Spanish and European averages but above Germany, where the proportion of employee positions is higher. A closer look at what is happening in other European countries reveals that the countries with the highest employment rates for non-employee positions are Greece and Italy, whereas those with the lowest rates are Germany, Austria and France. As García Perea and Román (2019) indicate, there thus appears to be a relationship between level of development and percentage of the population that are employees, although the trend appears to be that the percentage of employee positions is declining in most countries.

As regards to stability in terms of contracts, we find that although below the Spanish average, the percentage of temporary contracts is much higher than in Germany and the European average. And even more concerning, unlike what is happening in those territories, where these percentages remained relatively stable throughout the period under consideration, in the Basque Country, it has been increasing steadily since 2014.

Lastly, with respect to degree of dedication (full-time or part-time), we find that from 2009 to 2014 there was a sharp increase in involuntary part-time jobs (that is, those with a part-time contract who state that this is because they cannot find a full-time job). This is so common that in the last few years, almost 12% of people in work in the Basque Country found themselves in that situation. Since then, this percentage has dropped to 8.5%, although it is still some way from the European average (5%) and even further from that of Germany (2.7%).

Graph 4.  Job quality
Graph 4. Job quality. Self-employed and work in family firms
Graph 4. Job quality. Employees with temporary contracts
Graph 4. Job quality. Involuntary part-time employment
Graph 4. Job quality. Legend
Source:  The self-employed data for Germany and the EU-28 includes members of cooperatives, as these data are not disaggregated at the European level.
  1. García Perea, P., y Román, C. (2019). «Caracterización del empleo no asalariado en España desde una perspectiva europea.» Boletín Económico (Jun).