As the third anniversary of labor reform approaches, the analyzes focus on outstanding issues and areas where legislation needs to move forward to overcome them. One of the most remarkable is the duality that the Spanish labor market maintains between certain workers benefiting from maximum protection and stability and others linked to precariousness. Here, the standard surprised its detractors: The weight of “untouchable” employees drops by ten pointsand this, by creating jobs and without applying a reduction in dismissal costs. Did Yolanda Díaz’s law achieve any of the objectives that the PP failed to achieve in 2012?
The question goes beyond the simple dichotomy between permanent contracts and temporary contracts. It focuses on the so-called “burden” that some workers, who are considered “armored” with working conditions accumulated by years of seniorityimpose on the opportunities of the rest. And given the cost of these positions, companies are hesitant to enter into permanent contracts. This would be one of the factors which would explain the difficulties of access to the job market and the turnover suffered by young people, but also by many older unemployed people, all victims of the rigidity attributed to employment in our country.
For almost 20 years, this is the diagnosis on which many analysts of the employment situation have more or less agreed, betting on a recipe to remedy it: “flexicurity”. A term that hides a controversial proposition: reducing the “protection” of certain workers in exchange for improving the opportunities of the rest. to access better quality jobs.
In a market where the temporary employment rate of employees has exceeded 30%, the solution seems to be to reduce temporary contracts, as was proposed with the legislation approved in 2021. But many economists point out that temporality and duality These are not synonyms. In fact, many concerns about the latest labor reform were based on the fact that although its design reduced the signing of temporary contracts, it did not provide incentives for companies to sign them, such as a reduction in compensation or clarification of the causes of dismissal. In other words, it did not go further than the previous reform, in 2012. This could either slow down job creation or make permanent jobs “precarious”.
And when they are forced to conclude permanent contracts for reasons of “legal imperative”, many employers decide to do without the least senior workers before having acquired sufficient seniority, which makes them the new ones. protagonists of work rotation. , like before the storms.
Various data from the last three years would confirm that this warning is based in reality. The increase in membership withdrawals due to dismissal or failure to complete the trial period, as well as the increase in unemployment benefits or the problem of discontinuous permanent employment, a contractual modality that has been promoted to facilitate the transition from temporary employment to stable employment, but which has become its own source of precariousness. All of this falls into the category of what the Minister of Labor herself, Yolanda Díaz, described as “disposable for an indefinite period.”
The triumph of flexicurity?
But the latest Labor Force Survey indicates a different scenario with regard to the improvement of duality: 54.6% of employed people were already in their current job more than 3 years ago, i.e. before the labor reform. And 41.5% have been there for more than 6 years. Before the labor reform, these percentages were 56.8 and 43.8% respectively. It’s a small decrease, but this brings these rates to their lowest level since the financial crisiswhen sheltered employment was reduced because it ended up being affected by the massive job destruction caused by the Great Recession. Today, this is part of a context of job creation.
It should be taken into account that these data include temporary workers and public sector workers. In other words, they are biased by the endemic volatility of the labor market in areas that it does not reach.
The balance is much clearer if we stick to permanent jobs. Workers under ordinary permanent contracts who were already working before the labor reform represent 62.8% of the total number of permanent workers, compared to 72.8% at the end of 2021. Those over 6 years old reach 48.4%, compared to 56.8% accumulated previously. of the entry into force of the new law. In your case, this is the lowest percentage since 2008.
Even if what is relevant in these data is not so much the reduction in the weight of these “privileged” positions as the way in which it is produced: in the context of an intense creation of indefinite jobs which, moreover, has increased its weight to record the total levels. In 2008, Permanent employees represented 70%, while in 2024 they would reach 83.6%.
This is what transforms data which, a priori, seems negative (since the most stable jobs are losing weight) into positive data, since it implies a better general distribution of employment opportunities which, contrary to what happened in previous times, is not because of the destruction of jobs, but rather because of the possibility of obtaining better contracts. A coherent idea with the increase in resignations in recent years.
If the most pessimistic predictions had come true, the weight of the oldest employees would have remained at levels similar to previous ones. In any case, the reduction would have been much less. In other words, “armored” jobs would continue to hinder the growth of those created after labor reform. But the data indicates resistance has been reduced and the current scenario is more balanced.
The labor market is thus approaching the desired “flexicurity” with an intensity that was not even achieved by the labor reform of 2012, which, following the “orthodox” recipe, focused on reducing costs. of dismissals so that companies lose their ‘fear’ of making permanent contracts, he succeeded. In fact, after its approval, the duality increased.
Should we talk about layoffs?
But there are other factors which have accentuated this recomposition of employment, starting with demographic aging, which has intensified the retirements of older workers who monopolized “armoured” jobs, thus allowing new workers to join. ‘access it. A natural replacement that occurs without veteran layoffs as happened during the financial crisis.
The age explanation has a negative aspect: the lack of younger workforce capable of occupying these same positions, although the government is convinced that the greater possibilities of accessing permanent employment , supported by an increase in migrant workers, can modulate this problem in the medium term. term. Indeed, those under 25 on ordinary permanent contracts are the group which has increased the most (118.7% since 2021, compared to 22.7% of the general average).
Despite this positive assessment, the duality between jobs more stable than others remains a problem in the labor market. The improvement in permanent employment is clear, but its trajectory seems to have reached its peak three years after the approval of the reform.
It is for this reason that many experts insist on making layoffs more flexible. They recall that the creation of jobs since 2021 is not so much due to the regulation of the labor market as to the economic situation and that we must take advantage of the context to opt for reforms which eliminate the “rigidities” of the market of work. That is to say, go further in the regulation of dismissals introduced by the PP and which remains in force today.
But Díaz points out the opposite: increase the cost of layoffs and, where possible, make them more difficult by reducing the causes. That is to say, reversing the changes in terms of layoffs introduced by the government of Mariano Rajoy in 2012. The success of the labor reform is the guarantee of this game which is played not only with the employers and the political opposition , but also with its own PSOE partners. within the Government.
