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Sandalio Gómez López-Egea, Professor, IESE, University of Navarra

A glimmer of hope

Wed, 05 Jun 2013 10:46:00 +0000 Published in La Vanguardia

Every month we have the opportunity to get to know the unemployment data provided by the former Inem and the desire to find in them a glimmer of hope to restore good spirits and prospects for improvement in the immediate future is renewed. For this reason it is necessary to be as objective as possible and to carry out a rigorous analysis of the data core topic , both in its absolute value and in the evolution it undergoes. Is it possible to be really optimistic?

Let's see: the issue of people on the unemployment lists has been reduced by almost 100,000 and the number of Social Security contributors has increased by 130,000. These are data good in themselves, but even better because they are unexpected. It is true that May is a traditional month for the creation of employment, given the start of the summer season, and that the largest percentage is due to temporary contracts for production needs. However, it is also true that the figure far exceeds the most optimistic expectations. A more detailed analysis shows that this is the third month in which the issue number of unemployed has decreased. It must be taken into account that the status as a whole of the Economics does not allow for much optimism, with a negative GDP growth, with the restructuring of the public sector, which for the first time in 2012 has generated unemployment, with the restructuring of the banking sector one cannot be optimistic in the short term deadline, regarding the generation of employment. Moreover, it would be considered a real miracle to generate employment consistently under these conditions. Against this backdrop status , only mechanisms hidden from the economist, i.e. the spontaneous behavior of citizens, both consumers and investors, make the impossible possible and put forecasts back in the wrong place. The seasonal character of the data in May will have its counterpoint in October and then we will be able to see if the structural data that is pointed out in these first months of the year will be maintained.

Expectations of improvement generate by themselves, as long as they are minimally realistic, that they take place and there enter to certify it, the issue of new businessmen, now called entrepreneurs, perhaps because it sounds better, the issue of self-employed, the growth of the percentage of indefinite contracts in the last year, the contracts of entrepreneurs, the slow but continuous growth of the contracts of young people, the internal flexibility of the companies, the increase of the contracts part-time, etcetera, that configure a moderately optimistic panorama, largely thanks to the labor reform.

It is not possible to throw the bells into the wind, but there is something in the climate that suggests a change of cycle, to use a sporting simile. Change that must be certify with the behavior and decisions of the citizens, the real protagonists of the economic reality. It is necessary to maintain hope in the citizens, in the social agents and in the determined attitude of the Government, with transparency and exemplary behavior, to reverse the economic crisis with the necessary effort of all, and consequently, the sustained generation of the employment.