Entradas Etiquetadas con ‘high unemployment’

By Gayle Allard

As Spanish unemployment rates climb toward 25% for the third time since the 1980s, the dilemma over how to respond becomes a key issue for the upcoming election.

Neither party is making radical proposals, for obvious electoral reasons, but also because none of the options are attractive.

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The Zapatero government´s long awaited labor market reform is a step in the right direction. Unfortunately, the time for yet another partial reform is long past.

It´s no secret that the Spanish labor market is dysfunctional. The combination of overly rigid dismissal regulations, overly generous and laxly administered unemployment benefits and overly politicized and unrealistic collective bargaining are a recipe for disaster, as Spain has demonstrated once a decade since the current labor legislation was passed in 1980. The cycle has repeated itself again: Europe´s fastest job creator in good years becomes its biggest job destroyer in bad years. Anyone who believes that the current institutions are workable is simply in denial. Seguir leyendo…