Four out of every ten people who receive unemployment benefits in Spain are pre-retired from the age of 55

Unemployment in Spain is intensifying among young people looking for their first job opportunities and among more experienced senior workers who have become unemployed just a few years away from retiring. The latest data from SEPE indicate that four out of every ten unemployed people in Spain belong to this last group.

Over 55 years old and early retired. The consolidated unemployment data of the month of October recorded by the SEPE indicate that 39.1% of people who receive some type of unemployment benefit belong to the group of those over 55 years of age. This represents a total of 687,929 people, which represents an increase of 2.4% compared to last year’s data.

This data is surprising, considering that the post-pandemic economic recovery has reduced general unemployment data and the number of beneficiaries of unemployment benefits in other age groups. That is, companies are hiring new employees, but not employees with more work experience.

Long-term unemployed. The report details, as a self-fulfilling prophecy, the most common destination for this group of unemployed: “The vast majority receive the subsidy until retirement age.” This actually turns them into forced early retirees who have very few opportunities to return to a labor market that closes its doors to them.

This implies a serious structural problem for labor policies that has not stopped growing. In 2009 the weight of this group was 17.4%, increasing year after year to the 39.1% registered last October. This represents an increase of 43% compared to the data recorded in 2009, when the financial crisis triggered collective layoffs.

Agreed layoffs that become chronic. In recent years, companies have offered their most senior employees agreed collective layoffs with advantageous conditions through compensation, special agreements with Social Security and subsidies. This allowed them to maintain their income level until they reached retirement age.

According to SEPE data, 62% of unemployed people over 55 years of age receive some type of subsidy, while 23.7% receive a contributory benefit, which is indicative of having been unemployed for less than two years. Furthermore, the special subsidy for those over 55 years of age is the only one that includes contributions, which further increases the burden on the Administration.

Close to golden early retirements. The latest reforms In terms of labor subsidies, they have reduced the interest of companies in this type of “golden early retirement.” The early retirement age, the age of access to the subsidy have been delayed from 52 to 55 years and the contribution base from 125% established by the previous regulations to 100%.

The problem is that, by lowering the conditions to avoid the abuse of this “agreed early retirement” formula, those who did not benefit from compensation for voluntary collective dismissal have also been harmed, and are in that situation of long-term unemployment. involuntarily.

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Image | Unsplash (Spencer Davis)