Spanish government approves new labor market regulation

Spain’s government has approved a new labor market regulation during the last Council of Ministers meeting of the year held on Tuesday morning, after agreeing on the law with unions and business associations.

The new regulation will come into effect as soon as it’s published in Spain’s official gazette (Boletín Oficial del Estado, BOE). However, it will need to be greenlighted later by Congress, where the political parties that form the executive do not have a majority.

In fact, Gabriel Rufián, Congress spokesperson for Esquerra Republicana, the pro-independence group that has facilitated the Spanish government on various issues, has already announced that ERC will vote against the law as there is still a "margin for improvement."

But, the Spanish government has already warned that not approving this market regulation would imply a return to the conservatives’ 2012 labor law.

Spain's labor minister, Unidas Podemos' Yolanda Díaz, highlighted that the law will allow the country to "leave precarious conditions behind," adding that "it is the first agreement in over 40 years that changes the trend of loss of resources and wage devaluation."

This reform is part of the government coalition deal between the Socialist party and the anti-austerity force Unidas Podemos.

Unemployment and minimum wage

At the end of the third quarter of 2021, Spain's unemployment rate stood at 14.5%, while Catalonia's was 10.9%.

"The government's aim is to build a new model of labor relations for the 21st century that modernizes the economy with the help of EU funds," said some sources at the time, without specifying anything beyond the fact that the new scheme will be part of the recovery plan sent to Brussels in order to receive said funds.

The Socialist-led cabinet raised the minimum wage from €950 to €965 gross per month in 14 installments – yet, the wages in Spain are still significantly lower than the EU average: in 2020, the average hourly salary was €16.8 in Spain, while the EU's was €21.5 and the Euro area's €24.2.