Wages in Spain grow above the European average when the unemployment rate "double" the average
| Date: January 22, 2010 | Source: Europa Press |
| Category: Economy | |
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The executive committee member of the governing council and the European Central Bank (ECB), Jose Manuel Gonzalez-Paramo , criticized on Friday that wages in Spain continue to grow above the European average when the unemployment rate "double" the average the EU and put it down to the "defective" collective bargaining in our country.
At a press conference at the headquarters of the Foundation of Savings Banks (Func), Gonzalez Paramo criticized the "huge wage rigidity" of the Spanish labor market and "insufficient decentralization" of the negotiation of agreements, which leads to the wages "have little to do with" sectoral conditions or undertakings, which hurts employment.
He noted that wage indexation agreements that incorporate drives wages are "even less sensitive" to cyclical conditions of the economy. "How one explain wages (in Spain) continue to grow above the European average when the unemployment rate is double the average (EU)," said Gonzalez Paramo.
He also mentioned the Spanish labor market segmentation, which means there is a market component "still majority" of workers with permanent contracts and well protected by labor laws and unions, compared to another group "where these guarantees and no support exist "and that is on which is producing the bulk of the adjustment of employment.
"WASTE" BY YOUTH job insecurity.
Gonzalez Paramo said that this situation affects employment less qualified but especially young people, who recorded an unemployment rate above 40%, which is a "waste" and a "social tragedy" because it shows that the "best human capital "is subject to job insecurity that" discourages "development.
The leader of the ECB noted that collective bargaining and market segmentation are the "two major problem areas" of labor, adding that its improvement depends on the "trial of the reformer" in this case, the Spanish-and if he is satisfied that these are the problems that the Spanish labor market is facing.
