Editor’s note: This article was first published in December 2014. Social Security affiliation figures are from October 2014, the IBEX 35 headcount (1.2 million) is from 2012, and layoffs and profits refer to 2011-2013. The list of IBEX companies has changed since; Bankia, for example, no longer exists.
The IBEX 35 is made up of Spain’s 35 largest listed companies. In other words, this index includes the most valuable companies and the biggest employers in Spain. You could say it’s the benchmark for the health of our economy.
The problem is that if we count the number of workers paying into Spain’s Social Security system, including both employees and the self-employed (autónomos), we get a total of 16,575,092 people, according to Social Security figures updated to October 2014.
Meanwhile, IBEX 35 companies employ a total of 1.2 million* workers, which is just 7.5% of all working people in Spain.
*Figures from 2012, so we assume that today, after subsequent job cuts at the IBEX multinationals, the total number of workers at IBEX-listed companies could be even lower.
Put another way, the Spanish economy doesn’t depend on IBEX companies but on small and medium-sized businesses, which, ironically, are the hardest hit and the ones that struggle most to find financing.
They are also harder hit when it comes to taxes, while IBEX companies enjoy large tax benefits. And as if that weren’t enough, it’s estimated that 94% of these companies operate in tax havens to avoid paying tax.
Not content with that, the companies that make up “Brand Spain”, and that should be pulling the cart on job creation, were responsible for more than 200,000 layoffs between 2011 and 2013. The exception was Inditex, which created the most jobs, hiring 19,000 people.
At the other end, the company with the worst record on job creation was Telefónica, which laid off more than 50% of its workforce. Together with the banks (led by Santander and Bankia), it has been the biggest destroyer of jobs in the country.
Taken together, the IBEX-listed companies made profits of €17,000 million, while most of them were cutting their workforces.
By region, the one with the most workers registered with Social Security is Catalonia (2,938,104), followed by Madrid (2,723,262). In third and fourth place come Andalusia and the Valencian Community, with 2,679,388 and 1,608,381 respectively.
Spain needs more entrepreneurs like Amancio Ortega, no doubt about it. But it also needs leaders who are aware of who is really going to pull the Spanish economy forward, and according to these figures, it won’t be the 35 IBEX-listed companies, much less if they dodge their responsibilities.
The backbone of the business world is made up of small and medium-sized enterprises, and until SMEs get help to hire people, Spain will stay exactly where it is now.
Further reading
Featured image: Enrique Olivar, CC BY-SA 2.0, via Flickr.
