Mercado laboral
Misc 10/12/2020

Government cuts short the 4-working-day debate

Experts agree that the economy's low productivity growth discourages applying the measure

Núria Rius Montaner
3 min
Tot el que podem aprendre de l'estranger

Madrid"Life cannot be about going from home to work and from work to home". This is how the Más País MP Íñigo Errejón defended a week ago in Parliament an amendment to the 2021 State Budget that proposed a four-day working week, that is, 32 hours. Errejón opened a Pandora's box on the transformation of the productive and labor model to "bet on innovation and the distribution of work to generate employment". The MP pointed towards "the exceptionality of the moment" - in which the pillars of the Spanish economy (starting with tourism) are more cracked than ever - to carry out this "reconstruction".

The speech did not go unnoticed by the Spanish government. The leader of Unidas Podemos, Pablo Iglesias, confirmed that "the issue was being discussed" and assured that the Ministry of Labour would study the proposal "through social dialogue" with the social agents, who, by the way, have been taken by surprise by the debate. The Labour Minister, Yolanda Díaz (Unidas Podemos), who did not deny the news, added that "it is a question of tackling working time in a general way". In fact, the coalition government agreement between Unidas Podemos and the PSOE includes "a complete reorganization of work, leisure and care times".

The first to respond was the Minister for Inclusion and Social Security, José Luis Escrivá. "I don't think Spain is a country that, with its levels of productivity and competitiveness, has to prioritize this issue", he said yesterday in an interview with El matí de Catalunya Ràdio. Hours later, and from the Moncloa, the Minister of Finance, Maria Jesus Montero, noted: "We must not be distracted from what we are concerned with, which is resources to allow for more opportunities, recover employment figures and address the great transformations the country is going through".

For the experts, 32-hour work weeks are not the best solution, at least "in the short term", according to the director of the cabinet of economic studies and infrastructure of the Chamber of Barcelona, Joan Ramon Rovira. Productivity refers to the efficiency of the productive factors, that is, labour force and capital. In relation to this, what is taken into account in terms of competitiveness or profitability is what is called hourly productivity, in other words, how many goods or services are manufactured in a few specific hours. In this sense, Spain is not exactly in a leadership situation, quite the contrary: 2019 closed with a negative rate of production per hour worked of 0.1%, one of the worst in Europe. However, it is one of the countries with the most hours worked: 1,701 hours per year compared to 1,363 in Germany. In fact, in recent years not only do people work more, but there has also been a - partial - recovery in employment. These figures are due to sectors such as construction, hotels, restaurants, or tourism, "with little added value", says economist Modest Guinjoan to the ARA. "Working more doesn't mean more production", says Rovira. For the expert, the debate is also closely linked to the productive fabric, which in the case of Spain is characterised by "low production and highly atomised sectors". The economist gives the example of an industry with low capacity and less productive SMEs than large companies: "In Catalonia we have one Grifols, or a few, but not as many per capita as Denmark has", he exemplifies. In fact, for economists this would explain why in the Netherlands or Sweden - with stronger productive sectors - fewer hours are worked. Spain, however, is also affected by a labour market marked by low wages and seasonality. "It's a catch-22 situation: a low productive sector that wonders, "why innovate", and an economy that pays low wages, finds it difficult to get out of this".

Another difficulty Rovira sees is that the transformation of the labour model has to go hand in hand with wages. "If hourly productivity does not increase in proportion to wages, the company loses money", he adds.

Key trinomial

"Dimension, training, and technology and research". These are the three keys that the economist proposes and that can lead to the improvement of productivity, although he adds a fourth one: "Internationalization". Although some of these key points have to do with companies and their workers, others are of a "public nature", Rovira points out. In fact, for experts, improving figures is key to public investment, which in the case of Spain has not recovered since the last crisis of 2008 as a result of austerity policies.

For the moment, this closes a debate that the government does not want to hold whilst the economy still suffers due to the pandemic. However, there is room for testing: Valencia will set aside 4 millions (of the 2021 budget) to subsidize companies that reduce working days to 32 hours a week.