Spain’s labour reform: three years on

By Vicente Clavero*

Three years ago the Spanish government of Mariano Rajoy pushed through its labour reform against despite big opposition. Most of the parliamentary groups and social forces rejected it, to no avail; well founded warnings about possible consequences were ignored too. The absolute parliamentary majority of the Popular Party meant the law got onto the statute book.

Businesses welcomed it as a godsend, as it allowed them to slash their workforces on the cheap, thanks to cut in the cost of layoffs and the fetters it put on trade unions too. And – they probably even they didn’t think of this one – the resulting deterioration in labour relations meant they could recruit new workers with worse conditions and at a substantially cheaper rate. Today, the government boasts that the reform of February 2012 has helped to stop the haemorrhage of employment and create jobs, but the reality suggests the opposite:

Unemployed: The number of people registered at the offices of the Spanish Public Employment Service (Servicio Público de Empleo Estatal, SEPE)) fell from 4,599,829 in January 2012 to 4,525,691 in January 2015, a decrease of 1.6%. However, the Labour Force Survey (EPA), a more reliable indicator, shows  170,400 more unemployed between the fourth quarter of 2011 and the same period of 2014, the latest available data.

Active population: The evolution of unemployment would have been even worse had it not been a noticeable decline in the economically active population due to immigrants who have been repatriated and Spaniards who has been forced to look abroad for their livelihood. The sum of both factors has resulted in a decline of 413,500 people since the entry into force of the reform.

Employed:  According Spain’s social security system and the National Statistics Institute (INE) there is a worsening of the situation, although they differ over when. The first shows a loss of 230,032 social security contributors during these three years, and the second quantifies the jobs lost at 583,900.

Working time. There are not only fewer employed, but their conditions are worse. According to EPA the number of full-time workers has fallen in 951,700, while those with part-time contracts climbed to 367,800, which, at the end of the fourth quarter last year represented a fifth of the total.

Temporary work One of the pretexts used by the government to defend its labour reform was to end the ‘duality’ in employment. Well, in this case  we have also gone backwards: over 1,350,300 permanent contracts were signed in 2014, 82,700 fewer than in 2011. However, last year there were nearly two million temporary contracts more than in the year before the reform.

These and other data highlight the reality of the labour reform. The rest is just propaganda.

*Journalist, writer and university professor El Publico