If a weapon is given to someone, it is normal to use it when needed. And that’s exactly what Spanish businesses are doing with the legal weapons that they have been given to hire and fire workers at their convenience. As a result, the labour market has become a roller coaster, up and down in an ever more unpredictable fashion. Or rather, a crazy carousel, no sooner on it and you have to get off, because of this disturbing phenomenon called temporary work.
Unemployment data released this week is an example of the diabolical dynamic in the labour market. Although August is traditionally a bad month for employment, this year produced figures that take us back to the most acute moments of the crisis. Not only did the number of people registered (as unemployed and seeking work) at job centres rise by 21,679, but the Spanish Social Security fund lost 134,289 contributors. With the aggravating circumstance that now GDP is in a growth phase, part of the recovery process so loudly trumpeted by the government.
The official explanation for this ‘blip’, which contradicts those who take for granted the end the recession, is that this is temporary, exclusively attributable to the end of the summer tourist season. However, there are some other very disturbing data, such as that on August 31, only on the day of 31 August, no less than 333,107 contracts were terminated. A figure that is unprecedented and reflects the growing urgency of many entrepreneurs get rid of staff, taking advantage of labour legislation that permits ‘throw-way’ employees.
They argue that this is precisely the point: the regulatory framework that is flexible enough for jobs to suit the needs of each moment. Because, otherwise, companies might die crushed by the weight of their own workforces. But then it just so happens that it is now companies have virtually recovered the level of profits they enjoyed before the outbreak of the crisis. While workers are still subject to the vagaries of the labour market and are increasingly impoverished due to falling wages.
Some say that this is the natural course of things, they first have to obtain profits and only then can there be sustained job growth. It remains to be seen. For now, what is clear is that companies are making good money again, but they remain loath to commit to their workers beyond what is necessary. Which suggests, that they just do not believe at all that rosy future Rajoy is painting more and more strongly as the elections approach.