Will the Spanish economy benefit from Prime Minister Mariano Rajoy government’s anti-worker labour market reform?
How tens of millions of people answer that question — and act on their answer — will determine the course of Spanish politics this year and beyond.
The law was announced on February 10 and already in force as a royal decree before adoption by parliament.
The law, Spain's “Work Choices Super” includes provisions to make sackings easier, undermine collective bargaining, increase casualisation of the workforce and undermine public sector conditions, among other measures.
The ruling Popular Party (PP) is looking to consolidate its rule by carving two divides within working people: between the younger generation of unemployed workers and their parents (almost required to feel guilty to have a job, especially in the “protected” public sector); and between the “egoism” of the union movement and the “overall good of Spain”.
If the PP offensive succeeds, it will take a heavy toll on workers’ living standards, job security and their right and ability to organise.
The immediate impact will be more job destruction, as the enforced decline in real wages drives down working-class consumption and overall demand.
But if the union and broader social movements succeed in making Rajoy’s labor law unenforceable (or just overwhelmingly hated), the door could open to a one-term PP administration.
Should a broadly-based popular movement against the “reform” emerge, it will influence whether the country just flips back to a Spanish Socialist Workers Party (PSOE) government (with its own “Work Choices Lite”) or whether the growth of left and left nationalist forces continues to erode the country’s rigged two-party system.
The impact of this struggle will be felt across Europe, not least because the “reform” has been urged by the European Union and other international capitalist institutions. They are all anxious to bring “archaic” Spanish labour practice into line with the neoliberal models elsewhere.
PP strengths
At first glance, the PP’s position looks pretty strong. Rajoy’s government is exploiting the widespread feeling that “something has to be done” about the economy (with 5.3 million official jobless, an economy set to shrink at least 1% this year, rising bankruptcies and mass poverty).
Rajoy also enjoys the whole-hearted support of the employing class and its peak councils. Of the 52 labour market “reforms” passed since 1980, this is the first the bosses are really happy about.
However, they still want to see Spain’s constitutional right to strike “regulated” and business contributions to the social security fund reduced.
The PP can also draw on the institutional clout it enjoys from governing 11 of Spain’s 17 regions. It could pick up two more in the March elections.
In Catalunya, conservative nationalist Convergence and Union (CiU) Premier Artur Mas has also indicated his support for the PP on “labour reform”.
In parliament, the PP faces a collapsed PSOE. A February Metroscopia poll shows that party at 23%, 5.7% lower than its worst-ever election result in last November's poll.
But the most important plus for the PP is people’s fear of losing what they have. The attack takes place in the midst of a dreadful slump.
Mass protests against the labour law on February 19 showed that popular anger is huge. However, it will take serious industrial action to make Rajoy and company retreat.
The uneven response to a 2010 general strike against the previous PSOE government’s amendments to labour law still weighs strongly on the union movement.
PP weaknesses
However, Spain’s various union confederations, led by the Workers Commissions (CCOO) and the General Union of Workers (UGT), can still trump the cards in the PP’s hand — if they truly have the will to do so.
The union movement has carried out the most successful industrial action within living memory. In 1988, a general strike forced the PSOE government of Felipe Gonzalez to withdraw plans for reduced lay-off entitlements and “trash contracts” for young people.
In 2002, strike action forced Jose Maria Aznar’s PP government to modify plans to lower unemployment pay and compensation for laid-off workers.
Also, official claims the reform is about job creation are so flimsy even treasurer Cristobal Montoro can only bring himself to promise employment gains in a hazy “medium term”.
Blaming “labour market rigidity” for Spain’s much greater job losses than in other European countries does not stand up to the most casual scrutiny.
From 1995 to 2007, Spain’s pool of workers grew by more than 5 million. From the end of 2007 to the end of last year, 2.7 million jobs were lost, yet “rigid labour markets” were the same.
The crucial driver was the surge and then collapse in private business investment.
The most important feature of the investment slump was the bursting of the 2000-2007 housing bubble, which wiped out 1.5 million jobs in the building industry alone. 1.2 million more jobs were lost due to the ensuing collapse in general economic activity.
Then there’s the question of how a national labour market system can produce regional unemployment rates that range from 12.6% (Basque Country) to 30.9% (Andalucia).
The main underlying cause of Spain’s 23.8% unemployment rate lies in the economy’s high over-specialisation in construction and tourism, two sectors in which part-time and casual work have become endemic.
The regions where these are most important (the south and the Canary and Balearic Islands) are where job losses have been most disastrous.
Spain’s economic structure means that the reform’s option for containing job losses during downturns — “flexi-security” agreements to cut working time and wages — is largely irrelevant.
These can only “work” in an economy with a broader industrial base that is exposed to less volatile shifts in demand.
The two main reasons the unemployment rate in the Basque Country is so much lower are the region’s greater weight in manufacturing and its influential cooperative movement, which views the sack as the last resort.
Autonomous University of Barcelona economist Josep Oliver Alonso said: “If Germany, Austria or Holland had experienced Spain’s building employment hypertrophy their rate of unemployment would also have exploded.”
What next?
The real purpose of Rajoy’s “reform” is clear enough — to use a once-in-a-lifetime opportunity of deep recession and people’s fear of job losses to break the spine and institutional weight of the union movement.
Can the unions withstand the onslaught? General secretaries Candido Mandez (UGT) and Ignacio Toxo (CCOO) say they are willing to negotiate “corrections” to the legislation, but there is not the slightest sign the government is prepared to compromise.
That leaves union leaders to decide their next steps in a campaign they call “an intense and sustained process of mobilisations and information”.
For Toxo, the key goal is “to change the state of mind of people, beginning with the workers”. He told Spanish television that “in any other circumstance” the delegates’ meeting that decided on the February 19 protests would have convened a general strike.
“But that’s what the government wants — to wear us out at the outset. It trusts that people are demobilised and fearful and that its own extra dose of legitimacy will stop people from following the unions along the path of general mobilisation.”
But the vast turnout on February 19 revealed that millions want further action from the union movement.
By the same token, it also spurred the employers to crank up their own propaganda campaign about young people bludging on benefits and refusing job offers.
Against the developing government-employer offensive, the unions will need all potential sources of support. These include, in particular, potential-but-still-suspicious allies in the indignado and broader social movements.
The goal must be to make them real collaborators in a common campaign for the rights of workers and the unemployed.
The other challenge will be to galvanise the unions’ delegate structures to carry the message about Rajoy’s “reform” to non-unionised workers and the broader community.
As for the timing of a future Spain-wide general strike, a good clue may come on March 29, when the Basque nationalist unions conduct a general strike in the Basque Country and Navarra.
[Dick Nichols is Green Left Weekly’s European correspondent, based in Barcelona.]