Spain has just reached an unprecedented milestone in its labour market: 22.5 million workers affiliated to Social Security. But this record figure comes with an uncomfortable paradox that defies expectations: unemployment rose in July, a month when it traditionally falls.

Regularisation driving employment

The engine behind this record is clear: the extraordinary process of migrant regularisation. According to eldiario.es, Social Security has registered 262,475 foreign workers registered through this process by 30 July. Thousands of people who were already living in Spain working in the informal economy—without rights, without protection, frequently exploited—have now signed their first formal contract.

The impact is immediate and tangible. In just a few months, this group has accelerated labour growth that was already positive in Spain. In fact, foreign employment hit a new high: 3.5 million people, meaning 420,875 more than a year ago. Of these newly regularised workers, 81.5% joined as employees, while nearly 5% did so as self-employed.

July: an atypical month for unemployment

What is unusual is that, amid mass labour insertion, unemployment rose by 19,500 people in July. A small increase in absolute terms, but revealing in its significance: July is historically a month of falling unemployment, thanks to the boost from hospitality, retail and summer leisure. This year, that pattern has broken.

Experts point to several reasons. First, education was a drag: the sector lost 128,500 jobs in July, as is customary before the return to school. Second, although net job creation was 41,700 employees on average (more than the 4,400 from the previous year), part of that demand was met by people who were already unemployed or inactive.

Accelerated labour growth: beyond the ordinary

The broader context is a labour market in accelerated expansion. In the past year, Spain has created almost 650,000 jobs, an annual rate of 2.9%. In April, when the extraordinary regularisation began, that figure was 517,000. Regularised migrants account for most of this upturn.

June and July have hit their historical highs in average affiliation precisely because of this effect. The phenomenon is widespread: foreign employment rose 66,000 people between June and July, cementing the new ceiling.

What does this mean in practice?

For hundreds of thousands of migrants, regularisation represents the jump from vulnerability to formality. Access to guaranteed minimum wages, Social Security contributions, labour rights. For the Spanish market, it is a supply of labour in sectors with unmet demand, though the unemployment figure suggests not all job creation is net.

The outstanding question is whether this boom will be sustained once the regularisation effect runs out, or whether Spain can consolidate a more resilient and diverse labour market.