Spain- EWCO CAR on impact of the crisis on working conditions – National contribution

  • Observatory: EurWORK
  • Topic:
  • Employment and labour markets,
  • Job quality,
  • Work organisation,
  • Working conditions,
  • Published on: 07 July 2013



About
Country:
Spain
Author:
Jessica Duran & Iñigo Isusi
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The current economic crisis is having severe effects on the Spanish labour market, leading to high unemployment rates. Even if it is widespread, unemployment has affected particularly men and young people, as well as workers from the Construction sector. Moreover, employment losses have spread specially among employees with temporary contracts, whereas the proportion of persons working part-time has increased. Future expectations amongst Spanish workers are very gloomy, with a fear of deterioration of working conditions. The main legal reform in the Spanish labour market was passed in February 2012, and it has given enterprises greater flexibility to modify employment conditions. Social Dialogue is very much endangered by the economic crisis.

1. General trends in working conditions

1.1 Basic trend data on selected working conditions indicators

The current crisis is having severe effects on the Spanish labour market. Certainly, due to the negative economic situation, the labour market has progressively deteriorated over the last 4 years (especially since the second semester of 2008), as illustrated by high unemployment rates.

According to the EPA (Active Population Survey), in the second quarter of 2008, the Spanish employment reached a peak of 20.4 million employed persons. Meanwhile, in the third quarter of 2012 (latest available data), the figure had decreased to 17.3 million, that is to say, 3.1 million people fewer at work. In this regard, the Spanish economy has experienced 17 consecutive quarters of reduction in employment.

Obviously, parallel to the decrease in employment levels, the number of unemployed people has experienced a dramatic increase since 2008 onwards. According to the latest available data for the third quarter of 2012, in Spain there are 5.8 million people looking for a job (that is to say, an unemployment rate of 25.0%). Dramatically, more than 52.5% of the total Spanish unemployed can be labelled as long-term unemployed, in the sense that they have been unemployed for more than 1 year (30.2% have been unemployed for more than 2 years), with their possibilities to find a job greatly reduced.

Table 1 Employment and unemployment in Spain (IIQ 2008- IIIQ2012)
 

IIQ 2008

IIIQ 2012

Total of employed persons (thousands)

20,425.1

17,320.3

Total of unemployed persons (thousands)

2,381.5

5,778.1

Unemployment rate (%)

10.4%

25.0%

Long-term unemployment (%)

21.1%

52.5%

Note: Long-term unemployment refers to the percentage of persons over the total unemployed who have been unemployed for more than 1 year.

Source: EPA Active Population Survey ('Encuesta de Población Activa' in Spanish). INE, Instituto Nacional de Estadística.

On the other hand, with regard to the type of contract of the occupied population, the EPA shows that nowadays there are fewer temporary contracts than in 2008. Thus, in the second quarter of 2008, 4.9 million salaried workers were under a temporary contract, whereas in the third quarter of 2012 they totalled 3.4 million. This means a decrease of 44.7%, in contrast with the 10.1% reduction among salaried workers with open-ended contracts (from 11.9 to 10.8 millions). Thus, it can be concluded that the crisis has specially affected employees with a temporary contract, as they account for a 48% of all job losses in the period.

Concerning working time, the number of persons working part-time has increased between the second quarter of 2008 and the third quarter of 2012. Thus, in the second quarter of 2008 2.45 million persons were employed part-time, whereas in the third quarter of 2012 there were 2.49 millions, which mean an increase of 1.6%. On the contrary, the number of the employed working full-time has decreased by 21.2% (from 17.9 to 14.8 millions). This illustrates the workload decrease derived from the crisis.

It is also interesting to look at the evolution of salary levels. The Minimum Inter-professional Salary grew progressively from 2007 to 2011 (from 570.6 Euros to 641.4 Euros per month), but it has remained at the same amount in 2012. Moreover, in 2007 the Minimum Inter-professional Salary experienced an increase of 5.5% with regard to the previous year, whereas in 2011 the increase was just of 1.3% (data from the Yearly Bulletin of Statistics of the Ministry of Employment and Social Security). In this line, the average total salary cost per month and per worker was 1,894.84 Euros in 2011 (1% increase in comparison with 2010) whereas the average total salary cost in 2008 was 1,762.78 Euros (5.1% increase in comparison to the previous year, 2007).

On the other hand, with regard to health and safety in the workplace, the Work Accidents Index (number of accidents per 100,000 workers) has decreased between 2007 and 2011, from 5,760.3 to 3,515.2, mainly as a consequence of two factors: public awareness campaigns and regulation, and workload reduction, which lets workers work slower. In absolute numbers, this means a decrease from 924,981 in 2007 to 512,584 in 2011.

With regard to trends in working conditions (e.g. employment conditions, working time, wellbeing at work, etc.) the Survey on Quality of Life in the Workplace (“Encuesta de Calidad de Vida en el Trabajo” in Spanish) assesses the situation of workers in the workplace by providing data on their own perceptions. Data available make it possible to compare results just for the period 2007-2010; to this respect, it is worth underlining that the deterioration of the Spanish labour market is becoming even more severe over the last two years, so that these data do not reflect the current worsening of working conditions. In this sense, it is interesting to note that workers’ perceptions have not extremely changed in this 3-year-period (i.e. 2007-2010).

However, some data from the Survey on Quality of Life in the Workplace do show that several satisfaction indicators have deteriorated in the 2007-2010 period, as a consequence of the economic crisis. For instance, employed persons feel less satisfied with their work stability, but there are a lower percentage of them looking for another job, probably as a consequence of high unemployment levels. Moreover, although the average general job satisfaction level has slightly increased, stress levels have increased. As well as this, it is worth noting that the average satisfaction level with the salary has decreased.

Table 2 Key indicators on working conditions from the Survey on Quality of Life in the Workplace (2007- 2010)
 

2007

2010

Employment conditions

Average satisfaction level with job stability

7.3

7.1

Percentage of occupied who are looking for another job

11.8

11.4

Working time and work intensity

Average satisfaction level with daily working time

6.9

7.1

Average satisfaction level with working hours flexibility

6.6

6.5

Wellbeing and health at work

Average job satisfaction

7.3

7.4

Average stress level

5.4

5.9

Work-life balance

Average level of difficulty to ask for a reduction in the workday due to family/personal reasons

4

4.1

Average satisfaction level with time spent with their children

6.9

6.5

Other indicators

Average satisfaction level with the salary

6.2

5.8

Source: Survey on Quality of Life in the Workplace (“Encuesta de Calidad de Vida en el Trabajo” in Spanish). Ministry of Employment and Social Security.

Note: Levels in a 0-10 scale.

Meanwhile, the 7th National Survey of Working Conditions elaborated by the National Institute of Security and Hygiene at Work (INSHT) recently published and referring to the 2011 year provides some interesting results on the evolution of working conditions in the time period 2007-2011. Accordingly to the available results, and generally speaking, working conditions amongst the Spanish workers have experienced an improvement in this time period, and better reflected in a number of elements:

  • A 68.5% of Spanish workers suggest in 2011 to be exposed to one or more accident risks in their working position, where this percentage is slightly lower than the 2007 figure (70.9%).

  • The percentage of workers exposed to excessive noise has decreased from 37.2% in 2007 to 34.8% in 2011

  • The percentage of workers exposed to harmful or toxic substances or involved in the manipulation of such substances has reduced in the time period from 27.5% in 2007 to 22.9% in 2011. Moreover, the percentage of these exposed workers who reckon to know the negative effects on health has increased from 79.1% in 2007 to 82.7% in 2011. Meanwhile, the percentage of workers exposed to biological harmful substances has been reduced from 9% to 7.3%

  • Accordingly to the available data, between 20% and 35% of the Spanish workers do not have the possibility to choose of modify the working method, the working rhythm, the order of tasks or their own ideas at work. Notwithstanding this, these indicators have improved since 2007

  • Average working hours have decreased (in 2011 they were 38.5 hours per week, that is to say, 1.5 hours less than in 2007. In 2007, up to 27.2% of workers worked more than 40 hours per week, where this percentage was 21.6% in 2011. Finally, 40% of the Spanish working population “usually” makes longer working hours than required, where this percentage was of 44.6% in 2007.

  • 61.4% of workers argue that within their work establishment there is a delegate for the prevention of labour risks, where this percentage has experienced an increase in comparison to 2007 (54.8%). Also, 36.6% of workers point out that, during the last year and for their working post, a labour risk assessment has been carried out (28.0% in 2007). Finally, 57.2% of Spanish workers argue to have received information or training on risks and security at work in the last two years, well above the 49.8% in 2007.

  • 12.6% of Spanish workers suggest having not enough information on labour risks, well below the 16.9% in 2007. Finally, 68% of workers suggest to have been benefitted from a medical check-up paid by their company in 2011, where this percentage was lower in 2007 (60.1%).

Notwithstanding these positive elements, there are also a number of elements that have experienced a negative evolution in the time period 2007-2011. Amongst them, the most important ones are the following ones:

  • The main deterioration in working conditions refers to mental stress and working rhythms. Thus, 23.9% of the Spanish workers pointed out in 2011 that they felt very stressed and coping with too much work, where this percentage is higher than in 2007 (20.3%). Also, 46% of the Spanish workers suggest having to work very quickly (44% in 2007). 45.3% of Spanish workers have to attend several tasks at the same time, where this percentage was 41.2% in 2007. Finally, 77.6% of Spanish workers suggest that they have to pay a high or very high degree of attention to their work, where this percentage was 67% in 2007.

  • Also, the available data shows deterioration in the number of workers discomforted with pains and efforts derived from their work. Thus, in 2011 up to 77.5% of all Spanish workers reckoned to be affected by this discomfort, whereas in 2003 this percentage was of 73.7%.

Finally, there are a number of elements where no significant changes can be appreciated between 2007 and 2011. Examples of these elements include, amongst others, the percentage of workers who have to often or always carry out complex and difficult tasks, the percentage of workers who have to work with very strict and short deadlines, the social support from colleagues and workmates or the percentage of individuals who are obliged to use individual protection equipments.

1.2 Composite indicator of job quality

Unfortunately, there is no composite indicator available in Spain.

2. Social differentiation/segmentation in the trends

2.1 Highlight what are the key particular differences between groups of workers in relation to the trends provided in section 1:

Although employment losses have affected all gender and age groups, available data shows that the employment reduction has affected specially men and young people. From a gender perspective 2.4 million men have lost their employment between the second quarter of 2008 and the third quarter of 2012 (i.e. a reduction of 20.2%), reaching a male unemployment rate of 24.7%. Meanwhile, 714.0 thousand women have lost their jobs in the same period (8.3% decline). Looking at data by age group, in the second quarter of 2008 there were 4.6 million young people (29 years old or younger) employed, while this figure decreased to 2.6 millions in the third quarter of 2012 (43% decrease). It is the oldest group (people over 45) the only group that has experienced a small increase in employment (0.4%), but surely this is only due to the ageing process of the work force.

Table 3 Number of people employed, by gender, age, economic sector and nationality (IIQ 2008- IIIQ2012)
 

IIQ 2008

IIIQ2012

Evolution

IIQ 2008 – IIIQ 2012

By gender

Men

11,859.4

9,468.5

-20.2

Women

8,565.8

7,851.8

-8.3

By age

16- 29

4,569.7

2,605.1

-43.0

30 - 44

9,016.0

7,851.1

-12.9

over 45

6,839.2

6,864.3

0.4

By economic sector

Agriculture

820.8

720.4

-12.2

Industry

3,244.3

2,442

-24.7

Construction

2,549.5

1,136.8

-55.4

Services

13,810.6

13,021.2

-5.7

By nationality

Spanish nationality

17,276.8

14,801.4

-14,3

Double nationality

205.3

307.4

49,7

Total of Foreigners

2,943.1

2,211.5

-24,9

Latin American Foreigners

1,398.2

881.9

-36,9

Source: EPA Active Population Survey ('Encuesta de Población Activa' in Spanish). INE, Instituto Nacional de Estadística.

If economic sectors are considered, data shows that although all sectors have experienced a downward trend, the Construction sector (typically a male dominated, low qualification sector) has reduced employment by more that 55.4% in the analysed time period, from 2.5 million people employed in the second quarter of 2008 to 1.1 million people in the third quarter of 2008. Manufacturing has also experienced a negative evolution, with a reduction of 24.7% in employment levels.

Employment cuts have also specially affected migrant workers. While employment of Spanish nationals decreased by a 14.3% since the second quarter of 2008, the reduction in employment among foreign workers goes up to 24.9% (from 2.9 to 2.2 millions). This reduction is especially noticeable among workers from Latin America (36.9%). Certainly, many migrants are being expelled from the labour market, and a large percentage of them are returning to their origin countries.

2.2 Briefly describe how the working conditions of specific workers groups are in a negative or positive way influenced by the crisis.

When considering the evolution of the type of contract in relation to age groups, data from the EPA confirm that temporary contracts have greatly decreased among all age groups. In any case, it is worth highlighting than young workers (16-29) are the most affected by employment destruction, in relation to both temporary and open-ended contracts. In particular, among youngsters, permanent contracts have decreased by even more than temporary contracts (respectively, 80.3% and 73.5% between the second quarter of 2008 and the third quarter of 2012). The fact that generally lay-off compensations to be paid by companies are comparatively lower in the case of young workers has certainly an influence to this respect.

On the other hand, with regard to working time, the average trend is the increase of part-time contracts (+1.6% since 2008). However, the number of youngsters working part-time has decreased by 20.5%, whereas it has increased by more than 8% for the other age groups. Thus, once again, it can be concluded that young people are the worst affected by the crisis.

From a gender perspective, it is interesting to note that part-time work has been traditionally more extended among women (74.3% of total part-time workers in the third quarter of 2012 correspond to women, 1.8 millions). However, it is remarkable that the number of men with a part-time contract has increased by 22.6 since 2008 (up to a total of 638.4 thousand men in 2012), whereas the number of women has decreased by 5.7%.

Finally, with regard to health and safety issues, it is worth noting that the Work-Accidents Index (i.e. number of accidents per 100,000 workers) has specially decreased in the construction sector (from 12,393.1 in 2007 to 7,735.3 in 2011), followed by the industry sector (from 9,426.8 in 2007 to 5,721.6 in 2011). This is mainly due to the loss of employment and decreasing workloads in both sectors.

3. Impact of economic downturn

3.1 Summarize the main findings and conclusions of national studies, reports, articles about the impact of the economic crisis on working conditions, covering the areas of health and well-being, career and skills development, employment security and work-life balance.

Equally to the situation in other large EU Member States, Spain initiated a downward trend in the second semester of 2008, which continued during the whole 2009 and 2010 (with average annual negative growth rates of the Spanish GDP of 3.7% and 0.3%, respectively). Meanwhile, the year 2011 saw a very modest economic growth period in the national GDP (0.9%), whereas the situation has dramatically aggravated during 2012 (with negative growth rates in the three last quarters of 0.1%, 2.0 and 1.8%), in contrast to a more dynamic situation in other EU Member States.

In the case of Spain, the economic crisis has been exacerbated by several elements, namely, the reduction of private investment and consumption levels (due to the need to reduce the high levels of private indebtedness both amongst families and enterprises and the lack of positive economic expectations of the future), the bursting of the housing market bubble (which resulted in a massive decrease in the employment levels in the construction sector, usually labour intensive/low qualified sector) as well as the current efforts to restrain public debt levels (resulting in added reductions of both public consumption and investment levels) (Banco de España, 2011). In this context, the only available instrument for alleviating this gloomy economic perspective has been based on a positive evolution of the foreign demand, with a strong emphasis on exports and a reduction in the imports level (mainly explained by the shrinking Spanish demand).

As shown in previous sections, this dismal situation is having a huge negative impact on the Spanish labour market, which is overreacting to the bleak economic panorama. In fact, the Spanish economy has experienced 17 consecutive quarters of reduction in employment (SEPE, 2012). As previously mentioned, even if this loss in employment has affected all gender and age groups, available data shows that it has especially had an impact on young people. Therefore, it is not strange that the ILO has recently warned about a “lost generation” of young Spanish people due to high unemployment (ILO, 2012).

Having in mind these figures, it is not surprising that future expectations amongst Spanish workers are very gloomy and that approximately 4 out of 10 Spanish workers are afraid of losing their job in the coming months (Randstad Workmonitor, 2012).

In this situation, trade unions fear a deterioration of working conditions as people who have a job might be readier to accept worse employment circumstances (i.e. in terms of wages, working hours, social benefits) if it helps to preserve their jobs (see a recent report from Comisiones Obreras (CCOO) called Economic crisis and their effects on the Spanish Employment for further information on the effects of the economic crisis on the Spanish employment figures and its composition).

A recent study published by the Spanish Trade Union Comisiones Obreras (CCOO) called Wage Situation in Spain during the Economic Crisis [2008-2011] shows that the Spanish economy is experiencing a major adjustment in total labour costs and wages/salaries per worker since 2009 and especially since 2010. According to this study, this profound cost moderation is achieved by two intertwined factors, that is to say, significant cuts in employment (as seen above), and also the containment or reduction of wages of those workers who remain employed, both in the public and in the private sectors. According to this study, enterprises are using this moderation in labour costs both to sustain employment levels (otherwise unemployment figures would be definitively higher) and to reduce their high debt levels, specially in the current context of difficulties for obtaining external financing, renewing credit lines or renegotiating debts (due to the situation of the financial sector). In this sense, the main Spanish Business Association (CEOE, Conferderación Española de Organizaciones Empresariales) maintain that measures to increase flexibility and wage restraint must be intensified in order to boost up competitiveness and make it possible an economic recovery that can translate into employment creation.

3.2 Comment and illustrate the role that in these studies is attached to the prospected long-term effects of the crisis on working conditions

It is difficult to provide estimations about the future prospects of the Spanish labour market, as well as the evolution of existing working conditions amongst Spanish workers. In this regard, some stakeholders suggest that in the short run (next 1-2 years) there is going to be a likely reduction in wages and a parallel increase in unemployment figures. This situation is going to result in a further reduction of private consumption, deteriorating even more enterprises’ expectations and current public accounts. By way of contrast, this reduction in salaries may contribute to an increase in competitiveness levels of those enterprises engaged in exporting activities, unless these export markets (i.e. EU Member States) are also affected by gloomy economic conditions (Fundación IDEAS, 2012). In any case, it is clear that existing prospects for the Spanish labour market in the coming years do not seem very positive at the moment, where this perception is shared by a large percentage of the working population (see the results of the Randstad Workmonitor, 2012).

Block 4. Government and social partner initiatives

4. Impact of policy reforms

4.1 Crisis policies as intervening factor

In Spain, since the economic crisis began in 2008, several related labour reforms have been passed, both by the former Socialist government and the new Conservative government (since November 2011). In June 2010 a small reform of working contracts was introduced, whereas in July 2011 the collective bargaining process was partially reformed so to allow a certain degree of decentralisation (see further information on this reform in ( ES1007011I). Both reforms can be characterized as partial (Banco de España, 2011). However, the main legal reform in the Spanish labour market was passed last 10th February 2012. In this regard, the Spanish Government passed a new labour legislation that has given greater flexibility to enterprises to change terms and conditions of employment. The main changes introduced by the new Royal Decree 3/2012 that specially affect working conditions include the following (ES1202021I):

  • The reform removes the classification system of workers by job category and generalizes the system of professional groups, thus facilitating worker’s adoption of new functions. In this sense, enterprises are allowed to move employees from one professional group to another which requires lower educational qualifications within companies, if this can be justified for technical or organizational reasons.

  • Wages, working hours and work schedules can be modified on the grounds of technical, organizational or productive reasons without administrative authorization. Thus, employers will have the ability to change salaries and working hours without obtaining employee consent, basically with the idea to encourage employers to consider alternatives to redundancy. The Reform also allows suspending contracts as a temporary adjustment mechanism to falling demand. Also, part-time contract workers are allowed to work extra hours. These extra hours will be counted when calculating social security contributions. Companies can extend temporary contracts up to a maximum period of 24 months.

  • The collective bargaining process has been reformed. Thus, firm level collective agreements are given priority, so that regardless of what is agreed at a higher level, representatives of workers and the employer may reach an enterprise agreement that suits their specific needs better (previously, sectorial and global collective agreements dominated contract conditions). Also, the reform allows businesses opting out from higher-level collective agreements to better adapt to market conditions. Finally, the Reform terminates with the so called ultra-activity of collective agreements (unlimited extension of agreements beyond expiration if a new agreement is not in reached).

  • The new Law facilitates dismissals in several ways. Thus, dismissing a worker for economic reasons is now considered valid when a company makes or foresees a loss, or experiences a persistent drop (defined as occurring for three consecutive quarters) in its revenues or sales. Compensation for permanent contract termination in case of redundancies for this type of objective reasons is established at 20 days per year worked with a maximum of 12 months Also, compensation in the case of wrongful dismissal for new open-ended contracts is reduced from 45 days per year worked (up to a maximum of 42 months) to 33 days per year worked (up to a maximum of 24 months). In the case of old contracts, the compensation would be calculated proportionally to the number of years worked before and after the reform.

  • The Labour reform has also introduced several measures to foster employability. These include changes in training contracts, intended for young workers (now up to 30 year old) with no upper secondary vocational diploma or a tertiary education. The law also establishes that any qualifications gained during training contracts will be accredited according to the national framework of qualifications. Furthermore, vocational training is recognised as an individual right, and all workers will be entitled to a minimum of 20 training hours per year paid by their companies. On the other hand, with the purpose of encouraging companies to contract youngsters and workers over 45, some reductions in the associated Social Security contributions are established. Finally, temporary Work Agencies are now authorised to operate as outplacement agents.

Obviously enough, it is still very early to provide a comprehensive impact assessment of the reforms presented above. If any, and based on the recent evolution of the Spanish labour market, it can be concluded that the reforms have facilitated redundancies and dismissals from the employers’ perspective, where this element has been obviously used by enterprises to reduce their wok staff levels in order to face with difficulties (certain or “expected”). It is an open question the effects of this labour reforms once the economy grows up again (if it does…).

4.2 Debate on crisis-related shifts in working conditions

Social dialogue on working conditions between Spanish social partners is currently very much jeopardised by the economic crisis, which is perceived as extremely acute in the country. In this regard, the recent Labour reform was deemed as appropriate by the main employer organisation (CEOE, 2012), who see the reform as ‘an indispensable step in the process of modernisation of our labour law, in order to obtain the flexibility that other European countries have already achieved”. On the contrary, the main Spanish trade unions UGT and CCOO have rejected the reform in very strong terms, as it is seen as a way to drastically slash workers rights that will induce a severe deterioration of their working conditions. Both CCOO and UGT sent to the Spanish President Mariano Rajoy in March 2012 a list of alternatives to the Labour Reform (see CCOO, 2012). Additionally, the unions have organized several national protests including two general strikes in 2012 (29th March and 14th November).

Meanwhile, since last January 2012 social partners have not had any further follow-up meeting to assess the progress of the II Agreement for the Employment and the Collective Bargaining, signed by social partners last January 2012. This agreement gives continuation to the so-called “I Agreement for Employment and Collective Agreement 2010, 2011 and 2012” (“Acuerdo para el Empleo y la Negociación Colectiva 2010,2011 y 2012” in Spanish), signed by the main Spanish social partners and which negotiated a path of wage moderation for 2010, 2011 and 2012 in the private sector (for more information see (ES1002019I).

Commentary by the NC

The Spanish labour market is being severely affected by the economic crisis, with high unemployment rates as the most evident consequence. Yearly salary raises have decreased and workload reductions have lead to an increase in the number of persons working part-time. In addition, the last labour reform, passed in February 2012, has given greater flexibility to companies to modify employment conditions (job functions, working hours, wages, etc.) and it also facilitates dismissals. However, working conditions as such of those workers still at work seem to have experienced an improvement during the crisis, specially as far as some elements are concerned (physical ambiance, accident risks, exposure to noise and harmful substances, autonomy at work, working time, information on risks, etc), whereas other elements (mental stress, high working rhythms and discomfort with pains and efforts) have experienced a deterioration. Future expectations amongst Spanish workers are very gloomy, and trade unions fear a deterioration in working conditions as many workers might be willing to accept worse employment circumstances (in terms of wages, working hours, social benefits) as a way of preserving their jobs.

Jessica Duran and Iñigo Isusi, IKEI research & consultancy

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