Thursday, February 25, 2010

Protests Over Pensions, But The Government Sticks To Its Plan

This week's protest by Spanish trade unions against the plan to raise the retirement age to 67 is unlikely to force Zapatero's government to change course. The turnout on the demonstrations held in various cities wasn't a complete disaster but it didn't suggest that the unions are riding a tide of public outrage over this issue. The weather, and the fact that the protests were organised for a weekday, didn't help the mobilisation. The union leaders have enjoyed a cosy relationship with Zapatero's administration so far, and many government supporters are nervous about the pensions issue but without feeling ready to take to the streets over it.

Zapatero acted in advance to try and defuse the protest by claiming that he was not going to impose a solution on pensions. However, I've yet to see any sign that his government is considering any other options and the measure is still being presented as part of the anti-crisis package, even though it has nothing at all to do with the current economic situation. There is a point at which Zapatero's tendency to offer one message to the “markets” and another to his supporters is going to come under intense strain. In the meantime the question is who will be the ally to guarantee a parliamentary majority for the changes.

There was an interesting piece in Público the other day about the dramatic predictions made during the 1990's concerning the sustainability of the public pensions system by banks and employer organisations. If any of these predictions had been even close to being accurate then the system would already have collapsed, yet the opposite has been the case. The obvious defence is to claim that nobody predicted the influx of immigrants into the Spanish labour market, but this is not the only miscalculation that was made.

Above all you have to take into account the self interest that lay behind such calculations, and many of these reports were issued shortly before or just after the PP came to power in 1996. I suspect, as we get nearer to the next election and the possibility of the PP returning to power, that we will get another wave of doom laden reports about pensions with the hope of swaying government policy towards private provision. It's interesting to see how little faith many institutions really have in the prized structural reforms actually producing any success, the underlying assumption being that many of those waiting to be allowed to retire will probably spend the latter years of their working lives either unemployed or struggling in poorly paid, insecure, jobs.


From Barcelona said...

Nice analysis. All this talk about austerity seems to neglect the problems with the tax system and wealth concentration where I think there is potential for reforms.

Xoán-Wahn said...

I don't know how I feel about working till I'm 67 (assuming I stay in Spain that long, of course). It's only two more years. The problem, I think, is that you hardly see anyone even near the age of 67 working...anywhere! If workers don't even make it to the age of 65, how is anyone supposed to make it to the age of 67?

santcugat said...

With Germany having raised the retirement age to 67 a couple years ago, Spain pretty much has to follow if they ever want to see any kind of bailout (or at least one that Zapatero could survive politically).

Jan said...

Thank goodness we don't have to work here! I couldn't see myself working until 67, even though I won't receive my UK pension until I'm 63. I was a Nursery Teacher before we moved to Spain and there's no way that I could have continued until 60, never mind 63, the job was just too physically demanding and anyway... what young parent really wants their 4 year old taught by grannies?

santcugat said...

Haha... I thought pretty much all parents here had delegated their duties to the grandparents.