Unemployment, temporality and labour laws reforms in Spain: a new standard?
Adoración Guamán, Raúl Lorente[1]
1. Austerity measures and labour laws reforms in Spain: an introduction
The economic and sovereign debt crisis is having a particularly strong impact on Spain and its labour market. In comparison with other EU countries, Spain has lost more jobs, more rapidly, than other European economies, more than 3.5 million since the beginning of the crisis. The dramatic increase of the unemployment rate has been used by the government and by the European Institutions as an argument for wide spreading the idea that labour law, including labour rights as the protection against dismissal, employment stability or the minimum wages and collective bargaining, is one of the main causes of such a dramatic loss of jobs in Spain. As it is happening in other European countries, since the beginning of the crises the Spanish Government has taken a large amount of measures including amendments to labour and social security regulations. The majority of these reforms have been done following the country-specific recommendations done by the Commission and the Council and the different National Reform Programs that are approved each year by the Spanish Government as the new system of EU economic governance establishes.
Among other measures, the Government has approved or promoted new types of temporary labour contracts; more facilities for the employers to hire part-time workers; creation of a new open-ended contract to promote entrepreneurship with a one-year trial period; reduction of the rights of young workers employed by training contracts; creation of a new fix term contract for young workers without any other aim or justification more than being under 30 and without employment. However, the promotion of temporality is not a new trend. Since the eighties, and involved in a permanent process of labour law reform, Spanish governments have created, deleted and finally encouraged different types of fix-term. This erratic policy in labour market regulation, together with other factors such a permanent abuse of temporary contracts by employers have produce a persistent high rate of temporary that has characterized the Spanish labour market. This temporality rate has been pushing down labour standards and promote the segmentation of labour market. The current paper aims to present the trends of labour policy regarding fix-term contracts, the evolution of labour law reforms related to this question and the different positions of social partners about temporality and its effects in labour rights.
2. Definitions of precariousnes and trends of the Spanish labour market
One of the broadest and most accurate definitions of precariousness is the one that considers it as "the set of material and symbolic conditions that determine life uncertainty in relation to the sustained access to essential resources for the full development of the life of a subject"[2]. As its authors point out, this definition has some clear advantages. On one hand, it overcomes the common dichotomies rooted in scientific studies over the situation of women in the labour market that deal only with what is qualified as "productive" without dealing with links between salaried workers and care relations; on the other, the definition is dynamic, reflecting a situation but also taking place in a continuum, a state that, as we will see, has followed the situation of women in the capitalist mode of production and that has been expanding in these last years to men, in fact, there are several authors who talk of a "feminization" or "domestication".
Specifying the definition to understand the relations between capital and work, we could understand precariousness as a phenomenon that increases vulnerability of working people as a consequence of the relations that define continuity and control of their professional career (Cano 2007). Precarious work is not only a consequence of a set of factors but also a means used by employers to displace risks and responsibilities to work. Such work, performed both in the formal and in the informal economies, is characterized by the uncertainty and insecurity variables on several degrees and planes, all of them linked between each other: duration of work, indeterminacy of the employer, regularity or irregularity of the work, insufficient income and social protection and even difficulties to join a union and to access collective bargaining rights[3]. All of this comes together with an increase in insecurity, dependency and vulnerability of male and female workers both in what is related to employment stability and what is related to employment conditions. Precariousness is thus not just related to the ability and autonomy to plan and control the professional and social life, but it also exacerbates unbalances in power relations between capital and labour that define an employment relationship.
When analysing the situation of precariousness, some indicators can be taken as guidelines for the study: unemployment rate; average of temporary workers; training contracts and new modalities of fix term contracts for promoting hiring; part-time hiring; low salaries; reduction of social protection rights in particular of retirement pensions; the majority use by women of existing conciliation measures and the lack of existence of effective co-responsibility measures; reduction of trade unionism. Since 2010 several labour law reforms aimed at reducing the unemployment rate have modified regulations affecting each one of this indicators.
3. Evolution of the labour market in Spain: unemployment and temporality as trends
The evolution of labour in Spain during the last two decades can be divided into two clearly defined periods: The first one, that is linked to the way out of the previous crisis circa the late 1994, and which extends itself until 2007, with the irruption of a new systemic crisis, is characterized by a period of strong economic growth and of intense job creation.[4]
During this period, the employed population in our country increases in approximately 8.5 million people. These data is very relevant, even though it is true that this shocking increase in employment and strong economic growth has some serious unbalances that are in the foundation of the differential effect that the international capitalist crisis is having on Spain. During this first period, most of the problems that cause Spain to bear one of the worst results in employment in the whole of the EU are caused, with an unbalanced growth model and with an oversize of certain economic sectors - particularly, the construction sector - and an underdevelopment of others - such as industry and the more advanced services linked to it. In the second period, from 2007 to the late 2014, is characterized by a serious economic crisis and an even more intense employment destruction process. After that, the first data point to a weak employment recovery process, focused on temporary contracts (which stand at the foundation of precariousness in Spain), in male sectors, while part-time contracts increase in number.
Figure 1. Evolution of employed, salaried and salaried private sector employees in Spain (2002-2015)
Note: Units (thousands)
Source: EPA (INE).
Graph 1 shows how since the very beginnings of 2008 until 2014, there is a net destruction of almost 3.7 million jobs, representing a 17.8% of total jobs in the country. Of them, 585,300 correspond to self-employed workers (16.3%) and 3,080,600 to salaried workers (18.1%), so the crisis affects both groups pretty evenly.
Graph 1 also shows that the evolution of the three curves (employed, salaried workers and salaried workers in the private sector) roughly shows the same evolution, so global employment trends are mostly influenced by the evolution of salaried workers in the private sector. Moreover, we can confirm that the current crisis shows a W-shaped behavior of employment, as observed by other authors: "The increase in unemployment shows the same W-shaped trend already pointed out, that received a renewed intensity since 2011, as a consequence of the deepening in policies of adjustment, and since 2012, by the effects of the labour reform applied through law 3/2012 that contributed to employment destruction (Rocha y Aragón 2012: p.83). In detail, the reasons for this fall back appear linked to cuts in public services, salary deflation and their impact on aggregated demand in the shape of a drop in consumption, the closure of companies and modifications of the legal framework that present incentives towards adjusting the employment variable, in contrast with other options.
After that, already in 2014, the effect of the "labour policies of precariousness"[5] undertaken since the beginning of the economic crisis and especially as we will see, since 2012 until currently, have allowed for a weak employment creation, which has been basically temporary and male.
Table 1. Variation of the employed population by professional situation (Spain, 2008-2014)
Variation 2008/20152008T1 / 2015T1 / Absolute / %
Occupied people: Total / 20.620,0 / 17.454,8 / -3.165,2 / -15,4
Self Employed: Total / 3.599,6 / 3.055,0 / -544,6 / -15,1
Employer / 1.132,5 / 854,2 / -278,3 / -24,6
Independent worker ( without employees) / 2.178,1 / 2.081,5 / -96,6 / -4,4
Member of a cooperative / 71,8 / 21,5 / -50,3 / -70,1
Family business / 217,2 / 97,8 / -119,4 / -55,0
Employees: Total / 17.010,1 / 14.393,9 / -2.616,2 / -15,4
Public sector employee / 2.920,7 / 2.956,7 / 36,0 / 1,2
Private sector employee / 14.089,3 / 11.437,2 / -2.652,1 / -18,8
Another situation / 10,3 / 5,9 / -4,4 / -42,7
Note: Units (thousands)
Source: EPA (INE).
Table 1 shows how employment destruction amongst salaried workers and in aggregated terms is focused in the private sector, since the public sector did not experience a net variation until nowadays. Nonetheless, this synchronic comparison makes it impossible to appreciate diachronic variations that have happened in the public sector throughout the crisis, in which a considerable employment creation has acted in the first four years, as a buffer of the intense reduction in the private sector (more than 3 million jobs, a 18.8% of the total), followed by a strong reduction in public employment since 2011 onwards, with the application of public service cuts policies, with both movements compensating each other nowadays.
For their part, the employers category experiences a serious reduction of 24,6% during the crisis, losing 278,300 jobs, which stands in contrast to the previous crisis when they increased in number. This, together with the strong reduction of cooperationists, seems to be an indication of the high reduction of jobs of employers. It also suggests that a part of the activity might have gone underground, something that is prone to happen in Spain during crisis. Still, within salaried work, the impact of the crisis is very different, with the strong reduction in employment in cooperationists (which had increased during the previous crisis), while self-employed workers experience a slight reduction, behaving as a job shelter category, as during crises, many workers resort to it or stay there due to the lack of better opportunities elsewhere. It has to be taken into account that "self employed work and micro-companies might constitute a certain shelter during the crisis, but even this "shelter" seems to become gradually weaker as the crisis develops." (Rocha y Aragón 2012: 72).
It is important to notice the evolution of unemployment in different collectives with especially high rates, such as women, young people or immigrants.
Regarding the situation of female workers, it can be stated that inclusion of women into labour market is a fact with no turning back. Focusing on the last decade, the employment rate has gone from a 40% in 2002 to a 54% in 2012, when it starts to be stable. However, women unemployment rates have always been higher than male’s rate, since last economic crisis arrived. Between 2006 and 2014, the unemployment rate in men went from 6.35% to 26.3%. At the same time, the evolution of unemployment in women experienced a variation from 11.34% in 2006 to 25.34% in 2014.
Figure 2. Male and female unemployment rate
Source: EPA (INE).
It should be note that the progressive approach happened between 2007 and 2013 broke when, after reaching a peak in 2013, the male rate has started to decrease (slightly but continuously). In fact, during the last two years, male unemployment rate has decrease two points while the female only drops a 0.79%. Everything points to the fact that men are recovering in a much faster pace, 137,500 jobs in a year in comparison to the 79,400 new jobs for women. This is not a phenomenon exclusively related to the labour market, but an international trend, as the ILO report "Work employment social outlook" (vid p.21) points out: "The beginning of the crisis saw a moderate closing of the gender unemployment gap, mainly because job losses were concentrated in male-dominated industries". However, the subsequent recovery in employment also mostly occurred in sectors where predominantly men are employed (e.g. construction), reopening the gender gap.
Regarding differences by age, it is clear that economic crisis have had a special impact among young workers. The economic crisis happened during the nineties had a strong impact among young workers(Santos 2003). The crisis started in 2008 have had a stronger impact, as it can be seen, ithas reduced the employment of young people (20 to24 years old) to less thanhalf;destruction of employment has been much worse among youngest workers (16 to 19 years old).
Figure 3. Employees in Spain by age segments
Note: Units (thousands).
Source: EPA (INE).
Focusing the analysis into foreign workers it becomes clear that unemployment rate among them has been always higher than among Spanish workers. After the last economic crisis the gap is broader, and it is significantly high if we compare national workers and immigrants from certain regions as Africa or Asia.
Table 2. Unemployment rates for different worker sub-categories in Spain
Total Unemployment rate / Spanish nationaliy / Double nationality / Total Inmigrants / EU / Rest of Europe / Latin America / Rest of world2006 / 8.45 / 7.97 / 8.78 / 11.76 / 9.39 / 10.43 / 11.30 / 15.52
2007 / 8.23 / 7.57 / 10.67 / 12.18 / 11.16 / 14.37 / 11.11 / 15.95
2008 / 11.25 / 10.13 / 13.46 / 17.44 / 16.02 / 18.07 / 15.17 / 24.65
2009 / 17.86 / 15.86 / 24.84 / 28.25 / 24.23 / 26.38 / 26.16 / 38.91
2010 / 19.86 / 17.95 / 25.60 / 29.95 / 26.65 / 28.34 / 26.48 / 42.31
2011 / 21.39 / 19.34 / 26.25 / 32.61 / 28.61 / 29.16 / 29.19 / 45.13
2012 / 24.79 / 22.80 / 30.66 / 35.94 / 30.30 / 34.35 / 34.16 / 46.57
2013 / 26.09 / 24.22 / 34.12 / 37.02 / 30.32 / 33.56 / 36.17 / 47.40
2014 / 24.44 / 22.81 / 31.66 / 34.50 / 29.61 / 29.98 / 32.38 / 44.80
Source: EPA Compiled by authors
Another remarkable factor is the fact that the slight reduction in unemployment that has happened during the last year has been more intense amongst immigrant workers than amongst Spanish ones (2,5 percentile points against 1,4) and also amongst the most unprotected immigrant workers (from Latin America and the rest of the world) than amongst the best positioned (EU), which can give us some hints regarding the kind of recovery that has been happening.
Together with unemployment, the evolution os which has been linked to the different economic crises, the other factor that characterizes the Spanish labour market is that of temporality. The high rate of temporality in the Spanish economy constitutes a unique feature in the European context[6].
As it can be seen both in figure 2 and table 2, the temporary employment rate (percentage of employees with a temporary contract with regard to the total of employees) risen from 15.6 per cent in 1987 to 32.3 % in 1991 (a third of the wage-earning population). This was the normal level during the following 15 years, while periods of strong economic growth in the late 80s, and the end of the 90 and the first half of 2000, have been characterized by a strong growth of temporality and by the maintenance of this in very high level.Thus, the creation of employment in Spain produced during these periods has been, therefore, very high in terms of volume but also linked to fix term contracts(Cordova, 1986;Standing,1988).
The average of temporary workers started its drop at the beginning of the last economic crisis. Since 2007 the destruction of employment has been affected especially temporary workers, which were the first expelled from the labour markest. This situation produced the effect of scissor marked by the reduction in the rate of temporality and the increase in the rate of unemployment
Figure 4.Rates of temporalityin Spain and the EU-15 (1987-2014)
Note: EU-15 (up to 1995 is EU-12).
Source: Eurostat.
Temporary is affecting more vulnerable groups as women, young peopleand immigrants, as it can be seen in figures 5 and 6, and table 3.
Figure 5.Evolution rates of temporality of women and men in Spain
Source: EPA (INE)
Figure 6.Evolution rates of temporality by age groupsin Spain
Source: EPA (INE).
Table 3.Rates depending on the nationality of temporality in Spain(in %)
Source:micro data from the EPA(INE), the second quarter of each year.
Figure 5shows the evolution of the rate of temporary employment of women and men inSpain in the last 28 years. From1987 until today the rate of temporality has been higher in thecase of women.The greatest difference was seen in 1991 and is nearly 10 percentage points (30% for males and 39% for women). During the current unemployment crisis the gap has been reduced to almost nothing. Figure 6 evidenced how the current crisis has not led to a decline in the rate of temporary employment among young workers and in table 3 can be seen the high incidence of temporality in the recruitment of immigrants.
As last point of this analysis of temporality it is important to look at the behavoir of public sector (figure 7). Until the second half of the nineties, the incidence of temporality into the private sector duplicated the rate among the public empoloyees. However, especially from the beginning of the former decade, temporary contracts at the public sector have raised to reach similar levels to private during the first part of the economic crisis, decreasing slightly after austerity policies were applied at the second part of crisis.