THE governor of the Bank of Spain has recommended temporarily scrapping the minimum wage to tackle unemployment.
In his first annual report since taking office last year, Luis Maria Linde called for more flexibility in the labour market to counteract the nation’s increasing jobless population.
“It would be worth exploring the possibility of establishing new formulas that would allow, in special cases, temporary departures from the conditions laid down in collective bargaining agreements, or exceptional mechanisms to prevent the minimum wage from acting as a constraint on specific groups of workers with most difficulties in terms of employability,” he said in the report.
Spain’s minimum wage is currently set at €645 a month with a record 6.2 million people out of work.
The national unemployment rate has hit 27.2% while Andalucia has been named as the second hardest place to find a job in Europe with 34.6% of the population without work.
Nationally, youth unemployment has reached a record 57.2%.
Linde also suggested making reforms to the state pension by increasing the retirement age and changing how pensions are calculated.
The report, which calls for the official age of retirement to increase from 65 to 67, recommends that calculating the amount a person receives should be based on contributions made in the last 25 years of working life rather than the last 15.
Wonder if the man with a smug face is prepared to work for less than the minimum wage? This is just one more move in the inexorable dismantling of the welfare state all over the E.U.
After all, the austerity scam is simply a cover for this.
What he is saying, with masking words is , let”s get rid of democracy, and the democratic rights that people have earned and went to war for….
This man is dangerous…as he thinks in numbers, not in lives.
“Andalucia has been named as the second hardest place to find a job in Europe with 34.6% of the population without work * * * – – – Or to be more accurate, claiming unemployment benefits. Which isn’t quite the same thing !
It´d be interesting to know the salary/benefit package of Señor Linde. I wouldn´t be surprised to discover that he makes more in one year than a mínimum-wage worker earns in a lifetime By all means let´s scrap the mínimum wage and call Spain what it is – a slave state with the largest gap between the rich and poor in Europe. Linde and his wicked group of friends just want a license to steal even more.
Does Linde’s new formula and flexibility include; Another day, another dollar?
It’s the sky high costs of employing people in Spain that’s the problem not the miserable amount of minimum wage.
I run an IT Services company in the UK, I have been coming to Andalucia where I have a house, for many years. I have often thought that in many ways Andalucia would be a superb place to base some of my team, we already have offices in Germany, The Netherlands and the UK, but every time we have looked into it the cost and complexity of employing people in Spain makes it un-economic to do so. We are not a hire and fire business, we have staff turnover from all causes including retirement and ill health at less than 4%, but as an employer I need the flexibility to change with a business climate that moves much faster than Spanish legislation allows for. Personally I think Spain is missing a trick. Granada for example is as close in climate and quality of life terms as anywhere on earth gets to Silicon Valley, there’s sun, wine, skiing, the sea, a world class university, and a global language. but untill the social and emploment policies reflect this millenium and not the last, the economy cannot beneift from international investment and local firms cannot compete on an even basis with International competition. It is of course a decision for the Spanish, as in any democracy, but given the dire state of the real economy and what can only be a thriving black economy, it is a decision you probably need to take fast.
I should also add that I don’t believe reducing minimum wages is ever the way forward, that rewards the sort of business no economy wants to see thriving. Pay workers well, develop them and encourage companies to settle and grow by making it easy to do business. If Spain needs to change anything it is that they need to remove the protection employees have in the forst year of employment. That stops employers trying becasue the cost of doing so is simply too high.
Although ANY suggestions that will ease the Spanish unemployment situation are welcome the whole EU banking system is balanced on a precipice.
For example: the ludicrously bankrupt Spanish banks are exposed to $34bn of bankrupt Italy’s debts and $40bn of Greek debt – while the German banks are exposed to $199bn of France’s debt and UK banks are exposed to $242bn of France’s debt which in turn is exposed to $334bn of Italy’s debt and so on …
Compared to the EU countries’ dependence on each other not to default makes balancing on the edge of a precipice appear quite safe.
Most of our economic misfortunes are traceable directly to greedy Bankers with an extensive knowledge of (but convenient disregard for) profit and loss accounting – in concert with a population those lack of financial “education” has led to (in many cases)an inability to construct and/or read a balance sheet.
It is ironic that a Banker should now feel qualified to offer remedies for a disaster that was precipitated by banks irresponsible lending to a naïve public.
so Dan, for you the solution could be reducing the minimum wage?
By balance sheet you mean company reports – they are a complete fabrication and tell no one outside the companies directors what the hell is going on.
The finance directors tell their accountants what to write and the auditors play along.
What Dan conveniently forgets to mention is that the over protection (same in France) comes from an historical basis when ordinary workers had zero protection. Does he wonder why so many of the oldest people in Granada province are so small, simple ,the terrible diet they were forced to live on by the feudal type system that applied until very recently.
“The governor of the Bank of Spain has recommended temporarily scrapping the minimum wage to tackle unemployment.”
“Spain’s minimum wage is currently set at €645 a month”.
Both quotes from the above article.
I wonder how much the governor of the Bank of Spain gets a month. I bet it´s more than €645 a month.
I wouldn´t know how to live on €645 a month, and I´m a pensioner. How many of you get more than that?