Creating employment

Gayle Allard. Professor. IE Business School

30 November 2015

The first challenge facing the political party that wins the upcoming Spanish elections will be to create jobs - but they have to be quality jobs, and that means getting rid of red tape, complicated contracts, and abusive practices.

There will be no debate on what the top priority should be of the political party that wins the Spanish elections at the end of this year. In a country were the rate of employment stands at 20%, that priority has to be job creation. And at a time when young people are leaving Spain because of the lack of opportunities, the jobs created have to be of a certain quality. 

Two things are needed in order to achieve this. The total revenues of a country depend on the productiveness of its workers. Spain’s level of productivity is low. How can it be increased? By making the country an attractive place for investment, in which to set up a business, or to expand or improve one that already exists. 

In spite of Spain’s economic recovery, it is still not an attractive place in which to invest. It’s still bureaucratic, with high taxes and complex regulations which are often changed on a whim, even in a key sector like that of renewable energies. It is vital that the task of doing business be simplified in order to make Spain-based entrepreneurialism attractive, and to ensure that each worker is more productive, and consequently better paid.

Furthermore, the labor reform needs to be completed. The cost of redundancies has been reduced, with disastrous consequences for some. With redundancy pay levels near the European average, the next step is to establish a single contract, setting out the same terms and conditions for any employer or worker. The current confusing range of different types of contract discourages both worker and employer. Why should a young person only aspire to a temporary contract? Why should an entrepreneur operating on a small scale have to resort to lawyers for any kind of labor relation? Doing away with the confusing terminology of contracts and replacing them with a single-model contract is fair, pro-social, and necessary. It is also important to make a serious effort to ensure the labor regulations are respected and that there are sanctions for abusive practices such as false self-employed workers. The high levels of unemployment in Spain have been used to make the Spanish in third world conditions. It should not be permitted.

Spain is growing and has a good economic outlook. This situation should be leveraged to make it into a country where employees also have a good outlook, and a country that can employ and retain the most qualified workers. 


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