With less than three months in office, Fátima Báñez took on the mission of reforming a dysfunctional labor market. She has experience making amendments to the former labor market. And adding to that framework, she has put together a piece of legislature that continues to support the status quo, but also includes two significant advances.
It introduces plenty of unknowns, such as whether arbitration will work, and also some risks, such as how the bills fare in court or how the job market will pan out in the near term.
The burden to create jobs will fall heavily on the Spanish government. But Báñez is not incorrect when she says that significant steps have been made toward modernizing labor relations. The law will now give incentives to companies that adapt to the current economic climate and make themselves more competitive in the global arena. But perhaps the most important thing is the newly changed mentality that the Minister has detected and promoted.
Her mantra is flexibility. Analyses are based on the notion that we have hit a ceiling, Europe is starting to get out of the latest pothole and workers and employers will prefer labor contract negotiations to more layoffs from this point onward.
The success of the labor reforms will depend on whether the new working culture can become established in Spain. Further, the government is starting to finalize other essential measures for recovery. If they agree that government service providers collect all that is owed them through the banks, a significant amount of funding will flow into the economy, which is another stimulus that is needed. Perhaps there is something missing in the labor reforms, but employers can already see that they are doing what is needed of them in order to facilitate job creation and reforms.
