Big industry, commerce, distribution, telecoms, automotive, construction. All these industry sectors are going to lay off workers. Telefónica?s recent round of layoffs clearly indicate how the biggest companies have tried to manage their workers in accords with president Zapatero?s wishes, but in the end were forced to cut their workforce.
A second wave of layoffs could result in a Spanish recession. In addition to reckoning with about five million unemployed workers, Spain will have to face decreased consumption and institutional investing and related affects on interconnected business. These effects occur when economic wounds have not healed or have been treated poorly.
The government?s solutions have been superficial and directed at the symptom and not the cause: a labor market that´s incapable of syncing with reality and adjusting salaries accordingly. It has only made ineffectual touchups accompanied by a lot of content-weak media noise. Neither the labor minirreforma nor collective bargaining has resulted in any positive agreements. The costs of employment remain high. Linked to taxes, these costs are exhausting what little liquidity that companies can keep during a dry credit market. Zapatero has defrauded employers. In the last encounter with his big plan in Moncloa, he asked his team to create work in Spain. Clearly the dedication was lacking. The government has not delivered the compensation that employers asked for, deep structural reforms. Instead, they have offered mere patches that don´t change a failed system.
Translated and Edited in English by Brandon Dyches and Jose L. De Haro
