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Saturday, November 03, 2012 11:46 AM

Spain Still Has 60,000 More Public Employees Than in 2007

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Spain is finally shedding some public workers, but the total is still substantially above the number employed at the peak of Spain's property bubble.

Via Google translate from Libre Mercado please consider Spain Has 60,000 More Public Employees Than in 2007

The Labour Force Survey (LFS) for the third quarter confirmed the trend that has been recorded in recent months in terms of job losses in the public sector. Specifically, the number of employed fell by 96,000 from the second quarter, reaching a total of 17.32 million, the lowest level since 2003.

However, what is important is that nearly half of job destruction is concentrated in the public sector: 49,400 jobs, of which 19,600 were permanent and 29,800 temporary workers. Also focused on trimming the regional administration, with a reduction of 44,300 workers in the third quarter

The number of public employees in September stood at a total of 2.99 million, thus lowering the threshold of 3 million for the first time since the third quarter of 2008. Nevertheless, the Spanish public sector still has to this day with more than 59,800 employees at the beginning of the crisis, as in the third quarter of 2007 they numbered 2,931,900 workers.

The reason is the substantial increase in contracts that government made during the crisis. Thus, despite the financial meltdown, the subsequent recession and the increasing deficit, politicians, far from adopting the necessary austerity, fired their workforces over the past few years. While in late 2007 Spain had about 2.9 million public employees, in the third quarter of 2011 the volume amounted to 3.22 million, a record of history. That is, public sector workers increased by 350,000 in crisis: some 45,000 in central government, another 45,000 in the Local and nearly 250,000 in the CCAA.

These excesses corrected only started late last year. Since the third quarter of 2011 to third in 2012, the public sector has slimmed its workforce by nearly 230,000 people, but remains above the figure recorded at the beginning of the crisis in the bubble peak. And indeed, this setting has accelerated in recent months: the Spanish economy has destroyed 836,000 jobs in the last year, of which almost a third are concentrated in the public sector, but in the last three months, half the work proceeds and destruction of government.
Spain needs to shed a lot more public workers instead of hiking taxes. The latter strategy backfired already. For details, please see Retail Sales in Spain Plunge 10.9%, Largest Drop on Record; All Pain, No Gain.

Should Spain further reduce public workers, here is the critical question: will those workers revolt? The popularity of prime minister Mariano Rajoy is low and sinking fast, and a number of regions in the country are threatening secession, so his hands are more than full already.

Mike "Mish" Shedlock

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