The Spanish Government is in the hands of the socialists and can, therefore, be expected to be very protective of the labor sector. It is to the credit of the Spaniards that, despite a left-leaning government, they have been very creative in meeting the challenge of high rates of unemployment, a scourge which seems to be inflicting many European countries. Labor policy in Spain is more pragmatic and less ideological.
A recent report that appeared in the Asian Wall Street Journal (September 30, 2005), described in graphic details the Spanish answer to high unemployment: "In the past three years, Gonzalo Ruano has labored as a gardener, a porter, a commuter-train worker, a moving man, a school-cafeteria monitor and now a gofer in an architecture firm. The third week of every month, the 25-year-old waits to see if he can keep his job and his monthly take-home pay of about $735 for another 30 days.
"Mr. Ruano is one of more than four million Spaniards—a third of the country’s work force—who toil in low-paid jobs under short-term employment contracts that last from one day to six months. The proliferation of these jobs has helped Spain cut its unemployment rate to 9.4 percent from 20 percent over the past decade, a feat some economists have dubbed the ‘Spanish miracle.’
"Spain’s inroads against unemployment contrast sharply with its European neighbors. In Germany, Europe’s biggest economy, 11.4 percent of the work force is unemployed, up from 9.2 percent in 2001. In France, unemployment rose to 9.9 percent from 8.3 percent in the same period. This year, the Spanish economy is expected to expand more than three times as fast as Germany’s and a third faster than the French economy."
I talked about this Spanish lesson in flexibility in labor policy in a recent dialogue I had with participants of the National Tripartite Policy Conference on Wages and Productivity organized by the National Wages and Productivity Commission (NWPC) of the Department of Labor and Employment. I told the participants that in a globalized economy in which Philippine minimum wages have been systematically higher than those of our closest competitors for investment capital, such as China, Vietnam, Indonesia and Thailand, there should be other ways of guaranteeing the average Filipino household what is called a living wage, which on September 15, 2005 was estimated at
P461 daily by the NPWC. If the higher standard called Threshold Family Income (made popular by the Center for Research and Communication) is used, the daily income needed by a family of 5 in NCR can range from R770 to R1,140.
Where there is flexibility in labor policy, such family incomes can come from at least three sources, e.g. a fixed salary for the head of the family, a part-time job of the other spouse, an entrepreneurial venture of a member of the family, some contractual work of an unmarried son or daughter, or an income from some savings invested in financial assets. For these sources of a family income to be possible, minimum wage legislation should not be applicable to the more than 20 million workers who are part of the informal labor sector. Among these workers, some 10 million are considered self-employed. The other half are non-regular workers who hop from one job to another just like the Spanish worker Gonzalo Ruano described at the beginning of this article.
A most innovative approach to provide employment for those in the informal sector, especially the contractual workers, is that of Asiapro Cooperative which has now 18,000 workers who are members of a workers’ cooperative that takes care of placing them in temporary jobs in cooperating companies. Asiapro mitigates the problem of those who are not permanently employed in the formal sector. It was inspired by another Spanish model, the famous Mondragon Workers Cooperative that started in Northern Spain.
Under this system, workers group themselves and form a cooperative society. The cooperative becomes the contracting party that deals with business groups that are increasingly outsourcing labor services that are not part of their core competence. The Asia Cooperative has the following goals:
To provide savings and credit facilities and develop other livelihood services for the members.
To engage in service contracting, management services, productivity and manpower resource services in activities such as, but not limited to, production, manufacturing, agriculture, office administration, sales and promotion, logistics, housekeeping and maintenance.
Those interested in learning from the experiences of Asiapro Cooperative may get in touch with Mr. Bien Nito at tel. 637-0912 local 313 or email _ HYPERLINK mailto:bpni-to@uap.edu.ph bpnito@uap.edu.ph_. For comments, my email is _ HYPERLINK mailto:bvil-legas@uap.edu.ph bvillegas@uap.edu.ph_.
