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José Luis Álvarez Arce, School of Economics and Business Administration, University of Navarra, Spain.

Reform to reform

Sun, 08 May 2011 08:01:30 +0000 Published in Expansion

After the setback suffered with the figures of the last survey of Active Population, the unemployment figure registered in April has brought some relief to the Spanish Government.

In fact, the Minister Valeriano Gómez, or President Zapatero himself, have clung to this statistic like a burning nail to make an optimistic interpretation of the status. Obviously, no one disputes that the creation of more than 80,000 new jobs work is good news.

But neither does it escape anyone's notice that we are facing a seasonal improvement due to the excellent start of the tourist season, the closing of which in a few months will be a new blow to employment. What the data of the EPA and the Ministry of work come to certify is that, in reality, very little or nothing has changed in our labor market.

The measures announced with great fanfare as reforms have been mere tweaks that have neither substantially improved the functioning of the work market, as the Government stubbornly claims, nor have they deteriorated it, as the unions believe.

Measures on all fronts
Our labor market needed -and still does- a comprehensive reform, with measures on all fronts to transform its structural rigidities, inefficiencies and injustice into a more flexible and favorable mechanism for employment. The problem is systemic in nature, and is not limited to a specific aspect, but affects all the institutions of this market and the interactions between them. It is enough to see, for example, the way in which the disastrous impact of an ill-advised regulation of labor contracts is multiplied by the absence of effective active policies of employment or by the obsolete model of collective bargaining.

The solution, logically, involves the creation of a new institutional framework of labor relations, closer to flexicurity; a framework capable of combining the flexibility that companies need in the organization of their activity, with employment and the productivity of workers. Although it may seem that we are talking about jauja, this subject of model works in other countries. Some experts, such as the well-known group of Fedea economists, know it well and have launched proposals for our country that are worthy of consideration.

But beware: no labor reform, no matter how good its design, will be able to generate employment by itself. Those who create jobs work are the companies, and if the demand for their production is meager, they will not hire employees, no matter how favorable the labor framework may be. What we can expect, and should demand, from a good labor reform is that, once the recovery has begun, it will facilitate the creation of employment and the advance of productivity, as well as contributing to a solid and stable recovery.

The crux of the matter, evidently, is how to make the spark of the recovery jump and ignite in the Spanish Economics . There are no miracle solutions here, but more structural reforms, assuming and sharing sacrifices for the sake of a greater future benefit. The reorganization of the financial sector, budgetary consolidation, educational reform, or the improvement in the quality of economic regulation are good examples of what must be done.

And this requires a change of mentality in Spanish society, based on the acceptance that nothing will ever be the same again, but with the conviction that it can be better if we all make the necessary effort today.

We are tired of demanding this same change from a somewhat pactful class politics. We must continue to insist. Others could also lead by example. I am referring to trade unions and business representatives, who, in a commitment to defend the true interests of Spanish society as a whole and of the groups they represent, should join forces and reach a good agreement on the future of collective bargaining. Let us ask all of them to reform. Only then will we see reforms that work.