The labour market is recovering at last. But it needsfurther reform
THIS was the news the government had been waitingfor. “Spain's labour market has made a 180-degree turn,” crowed the prime minister, MarianoRajoy, as the country announced the first annual rise in employment in six years. Thenumbers show that unpopular reforms to the malfunctioning labour market are starting towork. But there is plenty left to do.
In the past year Spain has created 190,000 jobs. The unemployment rate, still one of thehighest in the euro zone, fell from 26% to 24.5% (see chart), and the labour force stoppedshrinking after six straight quarters of decline.
The labour reform in 2012 gave companies more flexibility to set wages and workingconditions themselves rather than through sector-wide bargaining, and cut severancepayments for unfair dismissals. Those changes, buttressed by a deal between unions andemployers, tempered wage growth that had far outstripped gains in productivity. How muchcredit do they deserve for the upturn in employment?
The answer may determine the political fate of Mr Rajoy, who defied street protests to pushreform through and faces a general election by the end of next year. The opposition SocialistParty claims that the number of unemployed has risen by more than 600,000 since Mr Rajoytook office in 2011, despite the reforms. Pedro Sanchez, the party's new secretary-general,promises to repeal them if it regains power.
That would be a mistake. Other factors contributed to the jobs recovery, especially the“whatever it takes” pledge by the European Central Bank two years ago to save the euro. Butreform played an important role, says Rafael Domenech, an economist at BBVA, a bank. Onepiece of evidence is that Spain is creating jobs at lower rates of GDP growth than before. Inprevious cycles, employment rose when growth hit 2%. This time the gain came during a yearwhen GDP expanded by just 1.2%.
To make a serious dent in unemployment, however, Spain will need to be more ambitious.Without further changes, the jobless rate will not dip below 20% until 2019, according to theIMF. The structural unemployment rate—the level reached when the economy is working atcapacity—is 18%, triple that of America.
One problem is that many small companies (with ten workers or fewer) have not benefited fromgreater flexibility. That is because the process of opting out of sector-wide agreements can becumbersome. Such opt-outs could be made easier.
Another is that nearly a quarter of workers are still on temporary contracts. This is damaging,because they are much less productive than those with permanent jobs and employers donot invest in them. One way to encourage firms to hire permanent workers would be to cutseverance payments to the levels of other European countries.
Nor has much been done for the 3.5m people who have been jobless for more than a year, saysMarcel Jansen of Madrid's Autónoma University. Many are poorly educated: Spain has one of thehighest school drop-out rates in the OECD. Those with qualifications often find that they arenot the ones employers want.
The answers, says Mr Jansen, include spending more on retraining and overhauling state-runemployment offices, which do a poor job of matching workers' skills with local employers' needs.The government has tightened rules for people receiving unemployment benefit toencourage them to look for work or to take training courses. But they need to be effectivelyenforced.
The government could lower the cost of hiring workers by cutting social-securitycontributions, which are high by European standards. A rise in value-added tax could pay forthat. Others advocate lowering the minimum wage for unskilled workers.
Mr Rajoy says he will not let up on reform until Spain's unemployment plague becomesmerely a “sad” episode in history. He has started talks with unions and employers on apackage of job-friendly measures, to be hammered out after the summer break. But withelections looming, few expect it to be bold.
1.at last 最后;终于;最终
例句:At last Andrew gave them a crumb ofinformation.
2.start to 开始
例句:There has been a busy start to polling intoday's local elections.
3.working condition 工作情况;工作状况
例句:Remove all hoses and restore valve to original working condition.
4.deserve for 应得
例句:You deserve for mastering this ability.