The reduction in working hours could affect eight million employees, according to Fedea

It would subtract 7 tenths from the average annual GDP growth over the next two years, one tenth more than what was forecast two months ago

SEVILLA, 29 Feb. (EUROPA PRESS) -

The reduction of the maximum legal working day to 37.5 hours without salary reduction could affect eight million employees, according to the latest 'Quarterly Labor Market Observatory' prepared by BBVA Research, Fedea and Sagardoy Abogados based on data from the Active Population Survey (EPA).

The study also shows that, without compensatory measures to alleviate the estimated increase in labor costs -- 1.5% of the Gross Domestic Product --, the reduction in working time would subtract around 7 tenths from the average annual growth of the GDP during the next biennium, one tenth more than the forecast made by BBVA Research in a study in December.

The observatory, presented this Thursday in Seville by the head of Economic Analysis at BBVA Research, Rafael Domenéch, and the Fedea researcher, Florentino Felgueroso, also shows that this reduction in working hours without compensatory measures would reduce employment by 8 tenths between the years 2024 and 2025.

The study also shows that, in the fourth quarter of 2023, job creation continued, but at a slower pace. The advance in employment was mainly due to the group of salaried employees in the public sector and self-employed workers, while salaried employment in the private sector barely changed.

Job creation boosted the hours worked by all employed persons, which increased by 0.7% quarterly CVEC, while the hours per employed person, which had decreased in the third quarter, stabilized in the fourth.

In turn, occupation and hours worked continued above pre-pandemic records, while hours per employed person remained below.

On the other hand, real productivity per employee fell, but less than in the previous quarter, and was 1.4% below the pre-pandemic level.

The 'Quarterly Labor Market Observatory' also indicates that the unemployment rate did not vary despite the unfavorable seasonality in the fourth quarter of the year. Thus, the incidence of long-term unemployment fell five tenths to 43%.

Wage appreciation moderated, but year-on-year growth in unit labor costs exceeded 6%, while the vacancy rate rose again to levels not seen since mid-2010.

During 2023, the percentage of employees with a temporary contract barely changed as a result of the drop in conversions of temporary contracts into permanent ones, among other factors, which is why the study indicates that the effects of the 2021 labor reform on the rate of temporality were concentrated in its first year of validity.

Temporary employment companies accounted for around 75% of discontinuous permanent contracts in 2023, while permanent discontinuous contracts represented 42% of the contracts managed by Temporary Employment Companies.

The Continuous Sample of Work Lives shows that 2.2 million affiliations had a discontinuous permanent contract at some point in 2022, 22.4% of workers who registered a new affiliation.

The number of withdrawals from Social Security affiliation due to voluntary abandonment continued to increase in 2023 and, after the labor reform, ordinary permanent contracts have become the majority type of contract among withdrawals due to voluntary abandonment.