SPAIN-LABOUR: Less Unemployment, But Fewer Stable Jobs

By Tito Drago Reprint | | Print |

Tito Drago

MADRID, Aug 14 1998 (IPS) - Unemployment has been falling sharply by the month in Spain, the European country worst affected by joblessness, but most of the new jobs are temporary.

The 1,786,000 people registered as jobless in late July by the National Employment Institute (INEM) represent 11 percent of the economically active population. That was Spain’s lowest unemployment rate since 1980.

But the Survey of Active Population (EPA), also a government agency, indicates that three million people, or 20 percent of the population, are unemployed. In 1995, the rate was 24 percent.

INEM bases its data on the number of contracts registered and on the registry of unemployed workers, while the EPA is based on 50,000 home surveys in which the status of employed or unemployed depends on the person who answers the survey.

People often say they are unemployed when they do not have a job with a fixed, indefinite contract. This would explain, at least in part, the different statistics and percentages reported by the EPA and the INEM.

Unemployment increased during the socialist government (1982- 96), despite the sustained growth of the economy in the first ten years of that period. It began to decline under the center-right government of Jose Maria Aznar, who took power in May 1996 after winning parliamentary elections in March.

Two of the main factors behind the decline in the unemployment rate since then are economic reactivation, which stands at around 3.5 percent a year, and a social pact agreed to by the government, trade unions and business organizations.

The pact, which the three sides started negotiating after Aznar’s election victory, was the first social agreement since the 1977 Moncloa Pacts that formed the basis for the country’s transition to democracy. It granted employers tax benefits for new work contracts and eased labour laws, permitting the creation of new temporary jobs.

Of the job contracts signed in July, 93.28 percent were short- term, lasting from one to six months. Prior to the pact, people who worked one month in a job became permanent employees and, if laid off, had to be paid sizeable allowances.

The Central Bank of Spain warned in May that the creation of permanent jobs had begun to run its course. The Bank’s warning was confirmed by the statistics issued in late July. These showed that while 80 percent of jobs created in 1997 were permanent, that percentage was halved in the first quarter of 1998, and had plunged to 6.72 percent by July.

The decline in permanent jobs has alarmed trade unions, which are demanding changes, and has also begun to worry the government.

When he presented July’s statistics, Manual Pimental, the Labour Ministry’s general secretary for employment, admitted that the beneficial effects of reforms that came out of the social pact seemed to be petering out.

The Worker Commissions Trade Union Federation (CCOO) and the General Union of Workers (UGT) sent out warning signals. The idea, they said, should be to create jobs, but also to improve the quality of work, the length of employment and working conditions.

The UGT also announced it would organize protests if its goals were not achieved at negotiations between business, labour and the government, aimed at establishing an employment plan.

Labour Minister Javier Arenas responded that “social dialogue cannot be based on threats”, and demanded that both the trade unions and business demonstrate their confidence in the negotiations, which begin in late September.

The Spanish Confederation of Business Organizations announced that, at the negotiations, it would request greater labour flexibility, including reductions in employers’ contribution to social security and payments to laid-off workers.

The trade unions, on the other hand, will insist that, now that economic growth has proved sustainable, “with the sacrifice of the workers”, it is time to attend to social demands.