Spain can ill afford the public sector and it should be downsized with workers’ rights watered down, say Spanish employers. But their arguments don’t add up.
Encouraged by the imminent arrival Spain’s new right wing government, employers have gone on the offensive.
Juan Rosell, chief of the employers association, CEOE, said this week that there are too many public sector workers in the country. It’s a scandal, he argues, that Euros 100 million a year are spent on public sector workers, or 10% of the nation’s wealth (GDP). And, he says, it is time to make it easier for bosses to sack them, as easy as it is in the private sector.
Spain’s unions disagree with Rosell’s assessment of the country’s ills – and his proposed cure.
Just 13% of the active population – that is people at work or seeking it – are employed in the public sector. That’s one of the lowest levels in the EU and well below the average of 16%, points out trade union central Comisiones Obreras (CCOO).
The most competitive developed economies, according to the OECD, have a much larger public sector workforce: its 26% in Denmark, 22% in Switzerland and 19% in Finland, CCOO adds. Or putting it another way – only Ireland, Portugal and Greece have fewer public servants per head. They are the same countries who have gone cap in hand to the IMF-EU-ECB “troika” for a bailout.
Which strongly suggests that a small public sector is a sign of economic weakness, and beefing it up, rather than slimming it down, will bolster one’s economy.
The offensive from the employers association is also based on a widely held myth about the costs and rigidities of Spain’s public sector labour force.
In fact, the 3.2 million public sector workers are not particularly well paid. Labour costs are broadly equivalent to those in the private sector, says CCOO, which bases its calculations on the employer association’s own statistics. And almost 800,000 employees, or a quarter of the total, are on a temporary contracts. Many among this new precariat were the victims of the 100,000 jobs cull in the public administration and health service between September and November this year.
Offloading the costs of the crisis on hard working civil servants will lengthen Europe’s longest jobless queues, further depress domestic demand and so very likely deepen the contraction in the economy.
A more constructive policy initiative for the new Popular Party Government of premier Mariano Rajoy, would be around taxation, the union confederation says.
Euros 42 billion is lost to the treasury in tax evasion by corporations and the rich – that’s more than half the Euros 92 billion deficit for 2010. Cracking down on Rosell’s tax dodging friends would make a big dent in the deficit – currently the highest in the Eurozone – and ensure adequate investment in schools, hopitals and care for the aging population.
The unions know this approach is unlikely to come out of a government that has long historical ties to business.
And they fear that behind this week’s statements by the employers’ lobby is another objective – by running down the public services and narrowing the gap in employment rights between private and public sectors, private corporations are laying the ground for their long-term goal of privatisation.
“Rosell is lying. He is protecting those who are defrauding [the Spanish state] and trying to destroy jobs. His objective is to take advantage of the crisis to permit the privatisation of public services for the purposes of profit. We should be maintaining and in some cases boosting and improving public services to continue to create wealth and wellbeing.”