The OECD Makes A Full Amendment To The Approaches Of The Spanish Ministry Of Labour

paro empleo

The Secretary General of the OECD, Ángel Gurría, yesterday presented the “Economic Survey of Spain 2021” together with the Vice-President for Economic Affairs, Nadia Calviño. The document is an amendment to the labour policy proposed by the Spanish government in its entirety.

It warns of the high impact of the coronavirus crisis on the Spanish economy and rejects a tax hike until the economic recovery is consolidated. It also asks the government to maintain the 2012 labour reform, which the Minister of Labour, from Unidas Podemos, insists on repealing. (So that after three years of Pedro Sánchez’s government no one, either in Spain or outside Spain, still knows what change will finally be made to the labour laws. A crucial issue if investment is to be revived).

The OECD recommends the government maintain the 2012 labour reform and calls for, in particular, “maintaining a flexible labour market that allows companies to adapt to changing economic conditions.” The organisation is in favour of giving priority to company collective agreements to the detriment of sectoral and regional ones. Just the opposite of what the government is announcing.

The international organisation highlights duality as the Spanish labour market’s main problem. And in order to correct this, it flags that “the range of contracts available to companies should be simplified. And the conditions under which temporary contracts can be used, for example, for seasonal or training jobs, should be clarified.” In addition, recruitment incentives should be targeted at the most vulnerable groups and be limited in time. “They should also be linked more closely to training programmes so that they can be a stepping stone to more stable jobs,” the report adds.

The report also criticises the minimum wage increases decreed by the Sánchez government. The organisation considers they have been “rapid and sharp” and that they have particularly affected young and less qualified workers. “The minimum wage setting process could be modified with the creation of a permanent independent commission to assess its potential effects. Then draw up recommendations for a gradual modification of the minimum wage in line with the evolution of labour market conditions and productivity,” it recommends.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.