Friday, October 29, 2010

The Last Testament Of Don Gerardo

It was a situation that really couldn't continue. The Spanish employers association was being led by someone who was facing an ever increasing number of legal difficulties caused by the fairly rapid collapse of most of his business empire. Even before he lost most of his companies, Gerardo Díaz Ferrán hardly set much of an example although that didn't seem to worry those who had elected him as their representative voice. After the collapse of Air Comet came the fall of his insurance company, to be quickly followed by his extensive chain of travel agents, Viajes Marsans.

If the way in which Air Comet ground to a halt didn't teach us enough about Gerardo's special approach to business management, then the way in which Marsans was disposed of closed the master class. Marsans was sold off to an asset stripper, who took on the dirty work of dismissing all of the employees. Just before the sale took place, Gerardo and his partner put themselves on the payroll of the company and claimed an annual salary of €170,000 each paid in advance.

There were rumours of rebellion inside the employers association for a few weeks before Ferrán finally gave way and agreed to call elections for his position. Still, he couldn't leave his post without a final touch of class. The way out of the crisis, he declared earlier this month, was for Spaniards to work longer hours for less money. We assume he was talking about this as a way out of his own crisis, because Spain already has a longer working week and lower salaries than much of the rest of Western Europe. It's a sign of the vision that these people have of the future, because long hours and low salaries are more associated with poor countries than with rich ones. Or with very unequal societies.

Ferrán had also dismissed the recent labour market reform as being insufficient. This is a surprisingly common view. Companies that use the same creative accounting techniques that they use to avoid paying taxes can now get rid of an employee with only 20 days notice. Add to that the bizarrre proposal from the government to subsidise dismissals next year and you can bring that down to 12 days - from 45. That so many commentators continue talking as if nothing has changed makes you wonder what they are looking for? Severed heads on a stake perhaps? The formal reintroduction of slavery?

We still won't see an end to the flood of crocodile tears over Spain's "dual" labour market until all of the unfairness has been rubbed out by leaving all employees in the same precarious situation. It's not as if the latest reform even affects the usage of temporary contracts anyway. Although the Partido Popular tends to keep much of its neocon economic agenda hidden from sight, they have floated the idea of extending a contract that currently guarantees no rights at all and the minimum wage to workers under 21 to all of those under the age of 30!

Anyway, the pretence that making dismissal easy is the key to creating jobs is now going to be put to the test. Nothing less than an employment miracle can now be expected in Spain. Except that the excuses will change, something else will become the key obstacle to progress. Perhaps it will turn out that education or training, or even changing the culture of Spain's employers are important issues after all. As for Don Gerardo, he will be placing his hopes on the PP returning to power and being generous enough to farm out some public services to him in return for his efforts on their behalf. So that once again he can lead by example.


ejh said...

I gather than Rajoy has just said he'd do what Cameron's done (leading Sid Lowe to call him a tosser on Twitter, by the way).

Graeme said...

I'm with Sid on that one. Apparently he claimed that Cameron's plans reject any tax increases (except for the tiny detail of a VAT rate higher than Spain's) and represent "una apuesta clara por el crecimiento". Looks like he's been smoking something different from his usual cigar.