The new labor market regulations introduced last March Spanish government, in agreement with industrialists and unions, are generating a very strong growth in permanent contracts. The new contracts ran between January and November of this year over 6.5 millioncompared to around 1.9 million subscribers in the same period last year: a percentage increase by 238.4%. That’s according to statistics released today by the Public Government Employment System (SEPE). If the labor market trend is also confirmed in December, the current year will end with it created over 7 million permanent jobs. A situation that corresponds to the first year of application of a labor market reform resulting from an agreement between government, industry and unions.
Young workers have also benefited from the boom in permanent employment (+142%). The youth unemployment rate fell to 31%, compared to an overall rate of 12.6%. In the years immediately following the 2008 financial crisis, the number of unemployed young people had reached 55%. On this occasion, a labor market reform based on maximum flexibility was launched to reduce labor costs and increase the country’s competitiveness. The rules have been heavily criticized for restricting workers’ rights and forcing many young people to emigrate. Now the trend reversal seems to be bearing fruit. The new labor reform it abolished most temporary jobs to provide employment stability and lower the unemployment rate.
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Spain, what is behind the labor reform that is eliminating precarious contracts and making open-ended ones fly?
“Stable contracts can boost consumer confidence and lead to an increase in consumer spending,” he told Portal Raymond TorresThink Tank Chief Economist Funcas of Madrid. Torres also said the strength of Spain’s job market is one of the pillars of the country’s unexpected economic resilience at a time of global weakness. “We asked Abandon the idea that introducing young people to the labor market should be done through flexible and unstable contracts“, he said Joaquin Perez Rey, Deputy Secretary of Labor and creator of the reform.
In order to limit precariousness, the reform provides for only two types of fixed-term contracts: the structurallyfor circumstances related to production, and those of substitute another employee. In the first case, “for the circumstances of manufacture” means a occasional and unpredictable increase that requires a temporary fix. The contract in this case must not exceed i six monthsbut if the collective agreement of the sector allows it, it can be extended to one year. The rules in effect this year include a controversial provision to make hiring one easier unlimited contracts also for seasonal workers Sectors such as tourism and agriculture. The reform provides that the seniority of workers with a contract discontinuous solid (which stipulates that the employee only works in certain periods of the year) is calculated on the basis of the length of his employment relationship, ie the contract, and not only on the basis of the periods during which the employee has worked. This treaty is important to limit precariousness in this sector agriculturalwhere fruit picking contracts have been abused. In this way, workers are guaranteed greater stability and companies the certainty of having qualified personnel at their disposal. Workers with this type of contract lead to very strong increase, 8 times compared to 2019.
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