How not to make the reforms

  • Jordi Sevilla considers that collective bargaining is a very weakened and rusty tool

The Government has been choked this week by the management of the C23 of the Recovery, Transformation and Resilience Plan, and it has also been stuck for a long time by the C30 R2-D of the same Plan. The first has to do with the labor reform and the other, with the pension reform. And one of the reasons for both problems coincides: are they reforms to be implemented because they are crucial, because they are in the Government Program, are they to agree with the social partners, to reach a consensus in Parliament or to negotiate with Brussels in exchange for 70+ € 70 billion from ‘Next Generation’ funds? And all this, in full RF (slowing down recovery) and with AI (rising inflation).

The schoolyard fight that we have seen these days until the president has said, remembering Solomon: not for you (Nadia), not for you (Yolanda, who is running an unpayable electoral campaign with all this scuffle). For an inter-ministerial group created ad hoc and that he will chair himself. And in the meantime, in that fight to win the position by seeking the electoral basket, we run the risk of losing the objective that both reforms should pursue, which is what really interests the citizens. Let’s go by parts.

The Spanish left have been hooked for six years on whether they want to repeal the labor reform imposed by the absolute majority of the PP in full European rescue, correct the most harmful aspects of it or develop a new Workers’ Statute adapted to the 21st century. The right wing of the PP, for its part, has it clearer: not to touch anything, because what there is is the best of what is possible. On the other right, he does not know, he does not answer.

But if instead of discussing the instruments, we focus on the problems to be solved, the consensus is broad and it includes issues that have been going on for decades: our productive apparatus is not capable of absorbing all the available labor force and this translates into a structural unemployment rate that is double the European average, a much more dramatic situation in the case of youth unemployment . Our productive apparatus works with a level of temporary employment (and precariousness) much higher than the European average.

Collective bargaining is a very rusty and weakened tool, partly as a consequence of the reforms introduced in 2012 by the PP to weaken workers as a negotiating party and thus facilitate a decrease in wages. This last aspect, even for those who think it was necessary in that critical situation, is difficult to defend a decade later.

Finally, digitization has given way to a new concept of platform companies that build their value around an algorithm and whose labor relations have become precarious to the maximum, threatening a deregulated and highly unbalanced labor future in favor of the employer. In addition to all this, public employment policies have not functioned adequately for decades, that is, without being able to adjust unemployed with business demand for workers.

The set of problems, and their interrelations, goes far beyond a question of labor market regulation. Among other reasons, because it affects the nucleus of our society and, therefore, of economic policy and, even, of politics to dry, but with capital letters. Trying to obtain partisan revenue from these matters, with noisy elbows, corresponds to the flaws of the partisan model, which does so much damage to our democracy. Thus, a structural reform of this scale is not carried out, which should aspire to last a long time and, therefore, to generate the maximum social and political consensus.

C30 R2-D is the key that identifies the other great reform, the one that seeks to ensure the sustainability of the pension system. Since the Toledo Pact was signed in 1995, most of the problems and their solutions have been detected and highlighted, although not all have been implemented due to the lack of political agreement to which the approval of a reform of the system by the PP, when it had an absolute majority to do so unilaterally and that, in part, it also wants to correct now.

Among the various points included in this section, there are two that, in some way, are offset: a positive one for today’s pensioners, such as the revaluation of pensions in accordance with the CPI. Another, more complicated for the pensioners of the future because it is a matter, whatever we call it, of reducing the “generosity” of our current pension model that fixes, for historical reasons linked to a tradition of low wages and misery pensions, a very high replacement rate between the last average salary and the average pension. This high “profitability” of the public pension system is behind two differential facts in Spain: the little development of company pension plans and even individual plans. Simply put, the public system is more profitable, for the majority of contributors.

Today, the reality is very different from that of forty years ago and we should tend to equate this relationship to the one that exists in other EU countries, which means that future pensioners will receive decent pensions, in line with what is quoted and revaluable with the CPI, but that they will keep a lower proportion with respect to their last salary. This is now called the intergenerational equity mechanism, and it is one of the essential pieces to guarantee the sustainability of a pension system that, remember, accumulates deficits with great ease. Although it has also been able to generate an important Reserve Fund during the years of boom property and employment, with a maximum of 66,000 million euros during the mandate of Zapatero.

The Government decided to separate this reform into two parts: one, already approved with the vote against PP and Vox, established the automatic revaluation with the CPI requested by thousands of pensioners in the streets. The other, pending, is the equity mechanism, that is, the “hard” part of the reform, which will thus be difficult to carry out. by agreement because it is not clear how the negotiating process will be done. It would give the impression that the Government has preferred to ensure short-term success among its voters, even if this puts at risk the medium objective, which, let’s not forget, is to ensure sustainability, for which downward adjustments such as those mentioned are needed. . Charging the Social Security deficits to the State, as has been done in the Budgets for 2021, changes the ball of the goblet, but avoids the objective pursued, which is not to substitute contributions for taxes in the future financing of pensions. Or if?

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Both reforms must be “approved” before the end of this year

In this game of Chinese chess with several simultaneous and overlapping boards on which Spanish politics is unfolding today, both reforms must be “approved” before the end of this year, as it is an established condition to receive European ‘Next Generation’ funds. If we take into account that there are another hundred pending reforms until 2023, It seems clear that the method followed for the C23 and C30 is not the best. If, in addition, we also know that both will have the vote against the parties of a frontal opposition to everything, I reaffirm myself in the idea that this way, with polarization and electoralism, it is not how the reforms that both our country needs. Maybe that’s why, because it’s not easy, that’s why they haven’t been done so far. With or without EU-funded investments, in return.

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