LIFE is looking up for metalworkers in Cuenca, east of Madrid. They have won a pay rise of 3% in real terms. In a country with falling GDP and unemployment of 18%, that is no small feat. Yet it is not unusual. Spain’s centralised wage-bargaining system awarded real pay rises of 3.5% in May, the highest in a dozen years. Spaniards in work might be forgiven for concluding that recession is beneficial.

The fate of Spanish workers is a story of contrasts. Some have never had it so good; others have never had it so bad. Spain has the European Union’s highest unemployment and one of its less generous welfare systems. It has shed 1.2m jobs in a year. It will soon have as many jobless as Italy and France combined. Pay rises for some have led employers to cut the jobs of others. Two-thirds of workers have armour-clad permanent contracts. But the rest are on short-term deals. They are the people now on the dole.

This two-tier labour market divides workers into a privileged group cocooned from the reality of recession and the disadvantaged on temporary contracts, in unemployment or in illegal jobs. Employers do not invest in training short-term workers and are wary of hiring on permanent contracts. At any hint of a slowdown they shed the short-timers. “That the crisis has hit Spanish employment disproportionately is due to the catastrophic way the labour market works,” argues Luis Garicano of the London School of Economics.

Professor Garicano is one of a group of 100 economists who have called on the Socialist prime minister, José Luis Rodríguez Zapatero, to set about labour-market reforms. The calls have fallen on deaf ears. Talks between unions and employers stalled when the bosses proposed to cut the cost of laying off privileged workers. The government retorted that this was a “red line” it would not cross. Mr Zapatero will not be taking on the unions.

Nor does he seem able to change Spain’s low-skilled economy. Unions and employers have spent a year failing to reform it. Inertia rules, for several reasons. One is that Mr Zapatero does not believe reform is a priority. Another is that he does not want to provoke a general strike. A third is that his minority government struggles to win parliamentary votes. One day of talks with potential allies recently saw tax rises on high earners announced and withdrawn within six hours.

Opponents of reform argue that labour-market rigidity did not get Spain into its mess. Toni Ferrer, chief negotiator for the General Workers Union says real-terms pay rises averaged just 0.5% a year since 2005. Today’s wage rises, he says, are based on official forecasts of 2% inflation, compared with slight deflation now. “The problem is not labour regulation,” says Mr Ferrer. “What needs changing is the economic model.” That model produced the housing bubble that is largely responsible for Spain’s woes.

Mr Zapatero seems bent on spending his way out of trouble. The budget deficit is heading for 12% of GDP. Fallout from the housing bust has forced him to set up a €99 billion ($138 billion) bank-rescue fund. The banks, especially the savings banks, are sitting on a pile of bad loans. Many of the newly jobless are unskilled construction workers, mostly on temporary contracts. They are now adding to banks’ woes by defaulting on mortgages. Recovery depends on getting them back into work.

Rising unemployment does not mean that Spain’s economy is shrinking faster than others. This year’s predicted drop in GDP of 3.2% is less than the European average—and far below Germany’s 5.4% drop. But Germany has shed fewer jobs (see chart). With a large pool of unemployed, Spanish firms may be able to rehire at lower rates. A two-tier labour market provides flexibility, but on the back of an underclass of temporary workers. This might strike most socialists as unjust. But Mr Zapatero seems happy to keep it that way.

Rising unemployment does not mean that Spain’s economy is shrinking faster than others. This year’s predicted drop in GDP of 3.2% is less than the European average—and far below Germany’s 5.4% drop. But Germany has shed fewer jobs (see chart). With a large pool of unemployed, Spanish firms may be able to rehire at lower rates.

Iniciado por brus

Si alguien cree que quitando esos privilegios van a salir ganando el resto de personas van espabilados. En hispanistán lo único que conseguirán es que todos seamos igual de tercermundistas y no variará ni un ápice la tasa de paro porque lo que falla es absolutamente todo. Empezando por nuestra nefastísima clase empresarial que es la peor de occidente y es peor aún que la de muchos países asiáticos. A este ritmo nos va a pasar todo dios.

Iniciado por brus

Si alguien cree que quitando esos privilegios van a salir ganando el resto de personas van espabilados. En hispanistán lo único que conseguirán es que todos seamos igual de tercermundistas y no variará ni un ápice la tasa de paro porque lo que falla es absolutamente todo. Empezando por nuestra nefastísima clase empresarial que es la peor de occidente y es peor aún que la de muchos países asiáticos. A este ritmo nos va a pasar todo dios.

Iniciado por brus

Si alguien cree que quitando esos privilegios van a salir ganando el resto de personas van espabilados.