The cost of dismissal
September 1, 2009
I am a businessman, this go ahead. And as a businessman I inclined to defend all that conducive to the interests of the company. It is natural. Or is that, for me, if lower contributions to Social security or if they cheaper dismissal I will seem fine, just as well that if they decrease the rate of corporation tax or increase the deduction for r & d. But being an interested party does not have why to cloud my judgment and, as says the famous phrase, "the truth is the truth her say Agamenón or its porquero" or adapted to the case "her tell an employer or the head of the Trade Union of metal".
All this is beside the point of the long and tedious negotiation business and trade union organizations have been perpetrating the spongy motto of "social dialogue". He argues the CEOE, among other things, that the solution to rising unemployment will come by the reduction in a few points of social security contributions and flexibility (common people cheaper) for the dismissal. And I, that I am a businessman and I know that I won't be very popular among my colleagues, I can simply say that that is not true with this statement. It is true that the dismissal in Spain is the most expensive in Europe, which creates an unfair discrimination between contract workers and those who have temporary contract. But it is not true that its cheaper will serve to create jobs. The only thing that is used to create jobs is working.
I do not know any entrepreneur who is waiting for that you lower the cost of dismissal to start hiring workers. And in fact, the experience of the years preceding the crisis shows that the cost of dismissal does not prevent the massive creation of jobs. The fact that in Spain the labour factor is so sensitive to the economic situation is attributable to factors of economic structure of deep roots and long term solutions. It is not a simple for the recruitment system. In other words, unemployment will decrease in Spain when demand comes back to grow vigorously, regardless of the cost of dismissal or a major or minor cuts in social security contributions.
Having said that, and before the unions nominated me entrepreneur of the year, I would add that the high cost of the termination of a labour contract does have direct implications on another one of the most alarming figures of the Spanish economy: low productivity. The 45 days per year worked just providing the worker with the passage of time, an armour of such caliber that, under normal conditions, many small and medium-sized enterprises will not never be able to cope. And that makes the employee in less competitive. The funcionariza, in the worst sense of the word. And at the same time, generates situations of great injustice within the companies which are always the same people just suffer adjustments: those that take less time in the company and especially workers with temporary contracts. That often are more preparations, the most competent and the most motivated. In sum, the most productive.
Let us therefore be realistic. We must deal with the reform of employment with the maximum consensus and perhaps gradually. We can not perpetuate unjust duality of having workers hiperprotegidos and others practically in the open. It is unfair and dysfunctional. This reform will result in a more balanced system of recruitment and an improvement in the productivity of the labour factor. But make no mistake, it won't do to create jobs.