Two out of every three young people who work for others in Spain have a temporary contract; we are at the head of the EU. To the problem of temporality is added that of unemployment: one in three young people is unemployed, compared to the average of 17% in the EU. Young Spaniards end up assuming precariousness, rubbish contracts, lack of professional development expectations and not working “on their own” as if it were what normal. It must not be. In the rest of the Union it is not.
The temporalityand unemployment They are two sides of the same coin, that of precariousness. If temporary employment is eradicated at the cost of increasing unemployment – which is already extremely worrying – precariousness grows.
Vice President Yolanda Díaz’s move translates into eliminating temporary employment to raise unemployment. The proposed solution to precariousness consists of shield the lucky ones who have an indefinite contract. And good luck to the rest. Bet on rigid collective agreements – as before the 2012 reform – to force companies to keep permanent workers with permanently rising working conditions that are not readjusted in times of difficulty. It intends to extinguish temporary contracts without offering alternatives to companies they need flexibility, which inevitably leads to more unemployment.
Flexicurity in northern Europe consists of offering more flexible fixed contracts and fewer junk contracts
The alternative to the reform of the past is one that truly looks to the future, and that seeks flexicurity from northern Europe, which consists of offering more flexible fixed contracts and fewer junk contracts; in facilitating internal flexibility (adjustments in the company) to avoid external flexibility (layoffs); in effective active employment policies; in closing the gap between education and the labor market and in creating incentives for innovation and entrepreneurship.
The bad thing is not losing the job; the bad thing is to lose it and not find another that allows the worker to maintain the same quality of life.
Minister Díaz not only closes the gap on flexicurity, but also wants to return to the collective bargaining model prior to the 2012 reform, which granted excessive power to the unions and intensified the rigidity of the labor market. For example, there was the ultraactivity, which means that when a labor agreement reaches its expiration date, it is automatically extended until a new one is signed. Thus, unions have no incentive to negotiate a new contract during a crisis period and tend to drag out the process until the context becomes more favourable.
Wages in Spain rose at a record rate during the 2008 crisis, while jobs were also being destroyed at a record rate
That is why wages in Spain rose at a record rate during the 2008 crisis, while jobs were also being destroyed at a record rate. Other contributing factors were the predominance of the sector agreement over that of the company (which prevented the company and its workers from adjusting to their needs) and the impossibility of pick up, which allow a company in difficulty to separate itself from the conditions of the agreement. All those barriers to internal flexibility were removed by the 2012 reform.
The following two graphs, taken from a 2010 blog post of mine Nothing is freecompare the reaction of the English labor market (salary adjustments and a small drop in employment) and the Spanish labor market (no salary adjustment; in fact, record increases in the crisis, with huge falls in employment) to show the need for the 2012 labor reform .
Why do the unions defend this return to the failed past? A clue: the labor reform that is being negotiated will affect the working conditions of 20 million workers and to the employment expectations of 3.4 million unemployed. However, the two largest unions in Spain, CCOO and UGT, have less than 2 million members. A reform that presumes its basis in social dialogue leaves 90% of the active population off the table. The most affected are the young. According to UGT data, only 12% of its members are under 35 years old. Who represents the future of Spain at that table?
The Government of Sánchez, the vice presidents and ministers Calviño and Díaz and all of us, of course, agree on the objective: we want Spaniards to aspire to jobs for which they receive a salary that values their contribution to society and that allows them to live a decent life. We also want young people to emancipate themselves, have children, have projects, start businesses, travel… It’s easy to agree on all this. It is more difficult to get the proposal right to make it possible. Of course, that of the Government is doomed to failure; we’ve already been there. The option to move forward is called flexicurity.
Unfortunately, we have no room for error to be able to afford bets aimed at collective frustration. When the future of the Spanish people is at stake, a reform of this importance cannot fail.
*** Luis Garicano is head of the Citizens delegation in the European Parliament, he is vice president and economic spokesman for Renew Europe.