Thirty Minutes Off The Day, Not a Penny Off The Pay

Spain's ruling coalition ties itself in knots over reducing the working week

I often write about the problems that come to the Spanish government from the opposition, both in Congress and the media, but the governing coalition has its own issues and one of them - tension between its components on whether and how to shorten the working week - appears to be coming to a head.

First, what are the components of the coalition? The big one is easy, the PSOE, Spain's social democratic party with a history going back to 1879. Its partner to its left is Sumar, both the name of a coalition of small parties and the name of one of that coalition’s components. Sumar’s star player is Employment Minister and Deputy PM Yolanda Díaz. Her roots are in the Spanish Communist Party, the backbone of Izquierda Unida, itself the backbone of the Sumar coalition. Note that Podemos forms no part of Sumar, indeed is its deadly enemy.

Yes, it’s all a bit matryoshka dolls and I haven’t explained the half of it, anyway, back to the main story.

Díaz is generally recognized to have been a successful and hard working minister. Under her stewardship the minimum wage has been increased by more than 50% and she has sharply reduced the abuse of temporary contracts by employers, among other reforms that have strengthened the rights of workers. Needless to say many commentators in the media and not a few academic economists predicted that these changes would lead to mass unemployment and general economic collapse. They haven’t. Even The Economist, ever suspicious of left governments, has had to doff its hat to the PSOE-Sumar coalition on this issue and unemployment today is lower than it has been since 2007.

Now she wants to reduce the maximum working week in the private sector from 40 hours to 37.5. The prophets of doom, unembarrassed by the failure of their previous predictions, are again howling. Here’s Andreu Mas-Colell for example, in the house journal of the Catalan bourgeoisie, advocating prudence i.e. not shortening the working week because he believes it would affect productivity and growth.

A shame he wasn’t so devoted to prudence when he was the Economy Minister of the Catalan Government and fire hosed public money at the promotion of Catalan independence abroad, an action the legal consequences of which he was spared by the amnesty granted to him and other separatists.

So what's the government’s problem? It’s that this proposed measure, bitterly opposed by all the employer organizations and their media loudspeakers, is making the PSOE nervous. Just before Christmas Economy Minister Carlos Cuerpo was talking about delaying its introduction till 2026. This didn’t go down well with Díaz who said calling for such a delay was something only an almost bad person would do, the spiciest thing she’s ever said in public about a colleague

This seems to have had some effect on Cuerpo who today said that not only does he favour reducing the working week, it’s a priority for the government this year but that the proposal needs to be “retouched” and that employers need to be “accompanied” (poor babies) to implement it.

Cuerpo is a technocrat (PhD in economics and from the elite civil service ranks) and he runs the ministry very competently. However, the strategic calls on the economy are made by Vice PM Montero and PM Sánchez and my guess is that some sort of fudge will be arrived at which will allow Díaz to claim success while delaying the effective introduction of the measures till the employers have been well irrigated with public funds.

So, what’s the PSOE afraid of? It has its eye on two things. First, for the measure to pass in Congress it’ll need the support of Junts, the Catalan nationalist party most sensitive to the concerns of the region's small and medium enterprises, it feels it won’t get it and doesn’t want to go to a vote it thinks it might lose. And second, the PSOE's sister party the PSC currently governs Catalonia and doesn’t want to make an enemy of that sector either.

Another factor is that the PSOE thinks that Sumar is on its last legs, that it will vacuum up most of its votes at the next election and, perhaps, that it was time to put Díaz in her place. It has always been very suspicious of parties to its left, particularly the Spanish Communist Party. I think that explains something of its hesitation on this matter too.

Overall, it’s rather a lot of fuss over not very much. 37.5 hours a week is not out of line with the European norm and if your business is going to be hurt by staff going home 30 minutes earlier each day, what sort of business do you really have anyway?

There are no regional elections scheduled in Spain this year. The government coalition partners risk very little if they put the measure to Congress in the strongest possible form and invite Junts to spit in the face of Catalan workers if it’s brave enough.