Bank Of Spain Recommends Suspending Minimum Wage To Tackle Unemployment

[cashinmattress]

link

The governor of the Bank of Spain, Luis María Linde, on Friday called for even more flexibility in the labor market than afforded by the reforms approved in February of last year to tackle rampant unemployment, suggesting that new formulas could be found beyond the reach of collective bargaining agreements and, in some circumstances, leaving the statutory minimum wage in abeyance. <-- 'temporary suspension of'

Watch what happens to a 'western' country when all worker rights have been revoked, especially the most basic principle one.. wages.

EDIT: and nothing tops off a thread better than a graphic.

Edited June 3, 2013 by cashinmattress

[The Knimbies who say No]

The minimum wage is a relatively recent innovation, I'm sure it's not effective given the fact it is not really possible to live on it (in the UK) without a topup from the State.

It just seems to anchor expectations.

I'd support a general strike by the lowest paid, might generate a bit of the right sort of inflation for a change.

[EUBanana]

Watch what happens to a 'western' country when all worker rights have been revoked, especially the most basic principle one.. wages.

That right wing dystopia known as Sweden has no minimum wage.

[durhamborn]

Well the UK answer to this is as bonkers.

Push back retirement age so less jobs become available for the young.

Pension £5600 a year.Tax credits for said young person with family with no job £18000.

So how does making some poor sod work 3 more years save money?It means someone who is worn out has to keep going while young fit people sit around with no job claiming 3 times as much as the pension would be.

[fluffy666]

The minimum wage is a relatively recent innovation, I'm sure it's not effective given the fact it is not really possible to live on it (in the UK) without a topup from the State.

It just seems to anchor expectations.

I'd support a general strike by the lowest paid, might generate a bit of the right sort of inflation for a change.

Well, as recently as a few decades ago - up to the late 1970s - we had full employment, and with full employment you don't need a minimum wage.

[cashinmattress]

Also note that Spain was a dictatorship until the late 1970's with Franco's death and their first democratic elections.

[Venger]

Well done Spain. A monopolistic wage rate that is too high for prevailing conditions causes more unemployment.

Conservatives have forgotten all the good reasons they opposed Labour's introduction of minimum wage in the first place. Gaps in pay levels much wider today from bottom to middle to top than before minimum wage was introduced, in my opinion. Middle management in public sector and executives in private sector awarded themselves much bigger pay increases.

Germany maintained it as it should be.

http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country

[Guest eight]

So how does making some poor sod work 3 more years save money?It means someone who is worn out has to keep going while young fit people sit around with no job claiming 3 times as much as the pension would be.

The very definition of tragi-comic.

[fluffy666]

Well done Spain. A monopolistic wage rate that is too high for prevailing conditions causes more unemployment.

Except that there isn't much actual evidence for that, at the levels we see.

The other problem is this: If we could make sure that the basics of life were available at cost, or cost+10% profit (i.e. Food, Housing, Energy, transport), then you could have a citizen's income of one sort or another and either no minimum wage or one set at a lower level.

[Bloo Loo]

Proof indeed, if any was needed, that Bankers have no clue how to create anything other than paper.

Theyve tried lending bits of paper at near zero cost, theyve tried bailing zombie Companies, now they want labour at zero cost.

Why anyone listens to these toasters is a mystery....well, apart from the brown envelopes they can magic up.

The Economy is not about banking..Its about doing things that people want to pay for.

[Trampa501]

The minimum wage is a red herring.

Do you suppose all the people working on the black stick to legal requirements? Do people here really think all those people working in kebab shops earn the minimum wage?

What about the interns who work for nothing to gain experience?

The easiest way to get someone to work below the minimum wage, is to get them on freelance basis. When you use a website called Fiverr and use that to pay 5 dollars for a job that takes 2 hours, how is that conforming with a minimum wage?

[easy2012]

Well the UK answer to this is as bonkers.

Push back retirement age so less jobs become available for the young.

Pension £5600 a year.Tax credits for said young person with family with no job £18000.

So how does making some poor sod work 3 more years save money?It means someone who is worn out has to keep going while young fit people sit around with no job claiming 3 times as much as the pension would be.

Can the pensioner not work 24 hours as well and so get £5600 + £16000 (due to some mean tested reduction) ?

[Executive Sadman]

The minimum wage is a relatively recent innovation, I'm sure it's not effective given the fact it is not really possible to live on it (in the UK) without a topup from the State.

It just seems to anchor expectations.

I'd support a general strike by the lowest paid, might generate a bit of the right sort of inflation for a change.

More likely our patriotic mandelsonian leaders would send out search parties to find another source of cheap slave labour from some untapped corner of the world.

[cashinmattress]

I think it will generally suck to be employed on minimum wage now, and see it severely cut in time from some possible intervention by the bank and government, wouldn't you?

[19 year mortgage 8itch]

More likely our patriotic mandelsonian leaders would send out search parties to find another source of cheap slave labour from some untapped corner of the world.

How is Turkey's EU accession looking this morning?

[LiveAndLetBuy]

A bit about Spanish employment law:

In Spain there are two main types of employment contract: temporary and permanent. Those on a temporary contract have very few rights and can be dismissed instantaneously without compensation. Those on a permanent contract have very strong employment rights: for example, if they are made redundant they are untitled to 33 days pay for every year worked (45 days for years worked before 2012) so it costs an employer over a years wages to lay someone off who has been working for them for 10 years.

People on permanent contracts do not change job regularly because they lose accrued redundancy, they would rather get made redundant first and then find another job. So they sit behind the same desk for as long as possible, doing as little as possible. And the longer they sit there the more expensive it is for an employer to lay them off.

By law people on temporary contracts have to be given a permanent contract when they have been working for 2 years with an employer. Therefore most people on temporary contracts get made redundant just before they have been 2 years with an employer and they then have to start again somewhere else. These are the people on the minimum wage.

Somehow the Spanish government has come to the conclusion that it is the temporary contract workers who are causing the problem, and they need their wage floor removed while permanent contract workers can continue having more and more job security as a reward for doing less and less.

They really are clueless.

[The Knimbies who say No]

More likely our patriotic mandelsonian leaders would send out search parties to find another source of cheap slave labour from some untapped corner of the world.

They have a huge blind spot with immigration, they are willing to burn the working poor to keep their Utopian ideals intact. I think some of them really believe that immigration on any level, for people with any level of skill, for a country with any level of demand/surplus for those skills, is always a good thing.

[R K]

Anything to prevent the rentier creditors taking a hit.

Even slavery.

[R K]

How is Turkey's EU accession looking this morning?

They could do with a little local war to focus minds.

Cyprus looks favourite.

[19 year mortgage 8itch]

They could do with a little local war to focus minds.

Cyprus looks favourite.

Meh.

I'll be more worried when they set sights on Crete. Again.

[RufflesTheGuineaPig]

Anything to prevent the rentier creditors taking a hit.

Even slavery.

meh. In order for some to live and not contribute, some must contribute and not live.

If you want fair wages for all, you'll have to accept your house becoming near-worthless.

[interestrateripoff]

I thought central bankers where fighting deflation? How do they expect people to buy over priced goods without a decent wage?

Depress wages, depress prices.

This is clearly dangerous talk, although I suspect his own wage won't be depressed to represent the new low wage tax payer?

[alexw]

I thought central bankers where fighting deflation? How do they expect people to buy over priced goods without a decent wage?

Depress wages, depress prices.

This is clearly dangerous talk, although I suspect his own wage won't be depressed to represent the new low wage tax payer?

Problem = extreme demand deficit.

Neo-liberal solution = crush wages.

On the bright side if they crush wages and the economy shrinks to what people can now afford that will surely spark a recovery, we have greece as a shining example of that.

[winkie]

Graduate interns have been known to work for nothing, zilch.....they must have other back-up financial support to support that.......all fine and dandy for some.

[the shaping machine]

Problem = extreme demand deficit.

Neo-liberal solution = crush wages.

Wrong diagnosis of problem = unable to understand solution.

Europe's real problem is that we are competing with 1.4 billion Chinese who will work for less money than us.

The current preferred solution is to keep the plates spinning in the hope that a solution of some kind turns up. Lower wages keep the plates spinning a little longer.