Spain sees advantage in keeping wages Low
by FFE EU News Staff
By keeping wages low, Spain is helping more people save their jobs.
Spanish Prime Minister Mariano Rajoy said lower wages are ‘one of the keys’ to keep Spain afloat during the crisis: ‘In difficult situations, it is better to bet on earning a little bit less and maintain as many jobs as possible.
‘The latest jobless figures can’t satisfy anyone, but they show us that there can be hope.’
According to a quarterly household survey, Spain is experiencing an unemployment rate of 26%. However, in November, the number of unemployed fell to 4.8 million. Spain also saw a 0.1% growth in its economy in the third quarter of this year.
The prime minister said ‘A more flexible economy allows alternatives to dismissing workers, and that has allowed the unemployment situation to stabilise.’ His conservative government has made it easier for companies to fire workers and prevent higher wage deals with unions, changes that many have said were infringing on the rights of workers. But Rajoy promised not to touch the minimum wage.
The International Monetary Fund announced that if Spain doesn’t introduce more reforms that would protect both businesses and workers, then the country’s unemployment rate will remain steady at 25% for the next five years.
Statistics agency INE revealed that, after the property bubble erupted in 2008, the average household income fell by 9.5% by 2012. Think-tank Fedea added that between 2010 t0 2012 salaries also dropped by 12%.
But the Spanish government remains optimistic of grow, and the prime minister said that ‘In Europe, the worst is over and growth and integration are next.’ He also emphasised the need for a banking union for Europe as a way to prevent banking failures in the future.