Recommends prioritizing the housing supply and warns that capping rents can reduce it
MADRID, 12 Abr. (EUROPA PRESS) –
The International Monetary Fund (IMF) has highlighted the impact of the latest labor reform on the temporary employment rate in the Spanish labor market, although it considers additional measures necessary to address duality and achieve greater stability, for which it proposes relaxing the protection of employment. employment, while warning of the need to carefully evaluate the effects of additional increases in the minimum wage or reductions in working hours.
As reflected in its final statement by the mission of the International Monetary Fund (IMF) that visited the country within the framework of Article IV, although the 2021 labor reform managed to lower the temporary employment rate by more than ten percentage points, to the average level of the EU, “additional policies are needed” to achieve greater stability of employment in the broad sense.
In this sense, despite the impact of the reform on duality in the labor market, IMF technicians consider that its general impact on the transitions from employment to unemployment “is less clear” and they propose, looking to the future, “relax employment protection legislation”, including reducing uncertainty around dismissal costs, in order to incentivize employers to enter into permanent indefinite contracts.
Other measures aimed at this direction proposed in the document would be to increase contributions for unemployment benefits by those employers with greater staff turnover, which could discourage excessive transitions between activity and inactivity under fixed-discontinuous contracts, which in turn perhaps they should be subject to more precise monitoring, while restricting the use of temporary contracts in the public sector, as planned, would also contribute to further reducing the temporary employment rate.
Likewise, the IMF mission considers it necessary to reinforce active employment policies (PAE) and improve incentives for accepting job offers in order to reduce the still high structural unemployment in Spain.
To this end, they point out that the Employment Law of 2023 “is a step in the right direction”, but consider that, to achieve decisive progress, activation requirements will have to be strengthened and better integrate active and passive employment policies through convergence towards a “single window” model.
They also highlight the existing margin to increase spending on PAE and improve the effectiveness of the regional agencies of the State Public Employment Service by strengthening the link between their resources and their performance in terms of job placement.
On the other hand, they point out that the exit from unemployment would “accelerate” by increasing the incentives for accepting job offers, as contemplated in the unemployment benefit reform proposal that aims to make subsidy benefits compatible with labor income.
The conclusions of the IMF mission that visited Spain also warn that, going forward, labor policy initiatives “should be carefully designed to avoid adverse effects on employment and growth.”
In particular, IMF technicians warn that, after rising more than 50% in the last five years, the minimum wage has reached the goal set by the Government of 60% of the average wage and emphasize that any additional increase should take into account take into account the possible detrimental effects on low-skilled employment and be guided by the recommendations of the Advisory Commission for the Analysis of the Minimum Interprofessional Wage, which they ask to give more autonomy and institutional weight.
On the other hand, they point out that “if not designed correctly”, the planned reduction in working hours in the private sector could increase labor costs and reduce production and workers’ income in the long term, which is why they recommend accompanying the “wage moderation” reform, as well as accommodate heterogeneity between sectors through collective bargaining to contain these adverse effects.
Likewise, they point out that, if an eventual reduction in working hours in the public sector is considered, it must be proportional to the reduced gap between effective working hours and the proposed legal standard.
Regarding the housing market in Spain, where prices have experienced a moderate increase, the IMF mission considers that to improve its affordability, the Spanish authorities “should prioritize stimulating supply, rather than distorting support for demand.” .
In this sense, the Government’s progress in its efforts to expand the housing supply stands out, taking advantage of the non-refundable transfers of the ‘Next Generation EU’ (NGEU) funds to finance the development of affordable housing on public land and the expansion of the park. of social housing, which is currently reduced.
He also believes that the ongoing rationalization of urban planning, including by “de-bureaucratizing” licensing at regional and local level, is also a step in the right direction.
For its part, regarding the introduction of caps on housing rental prices in stressed areas, contemplated in the Housing Law of 2023, which so far have only been implemented in some parts of Catalonia, the document recalls that previous experiences suggest that rent caps can reduce the supply of rental housing and limit access for the most marginalized groups, “thus contravening the very objectives of the law”, which is why an evaluation of the initial impact of the caps set is necessary by Catalonia to inform the course of policy in the future.
