Labor unions and Spain's employers' association have fabricated a document with slight advances in regard to salary moderation and flexibility within companies. Some of these measures would have helped at the beginning of the crisis, but now they are practically useless.
A half-percentage point increase in salaries when, in reality, salary cuts are necessary is not going to be adequate. And the measure is not going to affect many multi-year contracts that are already signed.
Further, most indications about firms' flexibility to hire and fire workers are subject to agreements made within particular sectors. That is to say, they are trying to protect the structure of collective bargaining agreements that labor unions and the employers' association has developed until now.
This situation revisits what happened in 1994, when salary freezes were overlooked and consequently labor markets did not get the deep reforms that were needed. The Spanish government should not fall into this trap again.
