1

Making labour market reform deliver more and better jobs:

The Spanish case

ETUC

Brussels 20 - 21 March 2006

Jorge Aragón

Comisiones Obreras (CC.OO.-Spain)

Labour market reforms and macro-economic policies in the Lisbon agenda

2

The pattern of growth of the Spanish economy Main characteristics

Positive

High rates of growth (>3% annual rate 5 years)

Increase in employment (2,7% annual)

Convergence to UE in GDP per person (93%-98% EU-25)

Surplus in the public accounts (1% surplus 2005)

Negative

High inflation (4% -2005)

Deficit in the current account balance of payments (7% GDP)

Indebtedness of families (110% income)

Internal context

High level of decentralisation (17 regional Parliaments)

3

External factors

Positive

Favourable macroeconomic context EU

Stable rate of exchange

Low rates of interest.

Support of the structural funds of EU

Negative

Increase in the price of petrol

Low rate of growth of GDP in the main economic partners of the EU

4

Internal Factors (I)Positive

Increase in domestic demand

Family expenditure: consumption and investment (homes)

Widening productive capacityIncrease in the supply of labour:

WomenImmigrants

Social stability; social dialogue

Stability in the budget, compatible with:

Increase in social expenditure

Increase in public investment policies

5

Internal factors (II)Negative

Industrial specialisation in sectors with low levels of innovation

Low productivityExternal trade deficit

Excessive protagonism of the building sector: homes

Increase in inflation

Speculation Segmentation of the labour market

High levels of fixed-term contractsLack of mechanisms for the integration of immigrants

6

Bases of social dialogue

Consensus on:

Improvement of competitiveness

Promotion of stability and quality of employment

Social Cohesion. Development of social policy

Stability and balance of public accounts

Two instruments for the agreements

Legislation

Bilateral agreements

General

Collective bargaining

7

Structure of the social dialogue

Background

Bilateral agreements CC.OO.-UGT/CEOE-CEPYME since 1997Employment stabilityStructuring of collective bargaining

Interconfederal agreements in collective bargaining since 2003

The present process of social dialogue Tripartite Social Agreements: Declaration of social dialogue 2004

Competitivity, job stability and social cohesion

Negotiation between: Government, trade unions and employers

Agreements on new legislation

Bipartite agreements

Independent functioning of the different areas of negotiation

8

Main topics in the social dialogue (I)With agreement

Regularization of immigrant workers

Extrajudicial solutions for labour conflicts

Observatories for the modernisation of industrial sectors Prevention of risks and injury at the workplace

Vocational training and lifelong training

Law for dependent persons

Extension of collective agreements

Social dialogue in the Public Sector

Improvement in the functioning of labour inspection

Minimum wage

Minimum pension

9

Main topics in the social dialogue (II)With disagreement

Law for gender equality

Transposition of directive on Implication of workers in the European Company

Pending

Reform of labour contracts

Reform of the general pension scheme

Statute of autonomous workers

State policies for education, research and development, energy policy

Transposition of the EU directive for information consulting for the workers

10

Annual agreements on collective bargaining

/\ wages (inflation and productivity)Clauses of wage guarantyPromotion of employment of quality (priority)Articulation of structure of agreementsLabour healthEqual opportunitiesPromotion of employment for disabled personsTraining

11

Diagnosis There is a direct relationship between the structure of

production and the labour market

The Spanish economy has strong limitations in the middle term:

* Competitivity

External trade deficit

Inflation

Low Research + Innovation

* Segmentation in labour markets

Quality of employment

Training

12

Proposals

Take measures towards a cycle of common expansion, and take advantage of the potential of the internal market

Cooperative structural reforms (i.e. energy, infrastructures)

Avoid fiscal competition

Encourage specialization in production more based on innovation

Prevent the segmentation of labour markets and job precariousness: Promote equal opportunities and integration of immigrants

Role of social dialogue to link macroeconomic policies and the reform of the labour market