February 28, 2021

The city councils reject millionaire employment plans due to the rise of the SMI


The Government insists that the rise in the minimum wage up to 900 euros is not having an impact on employment, despite the fact that organizations such as the Bank of Spain, BBVA and autonomous organizations such as ATA insist on the strong impact they are having and will have on the occupation. Now it is the town councils that recognize that the rise is an obstacle to finding employment for the unemployed.

The increase of 22.3% imposed by Pablo Iglesias to Pedro Sánchez and approved last December is also having an impact on the employment policies applied by the town councils. The impossibility of facing the extra that supposes raising the salary to the beneficiaries is causing that several local governments are renouncing millionaire aid. Are, for now, the cases of Jerez de la Frontera, Sevilla, governed by the PSOE, and Malaga, in the hands of the PP.

The nexus that unites the three administrations is that they are part of a community that holds the record for the greatest number of unemployed. Of the 3,354,200 unemployed people in Spain, 829,500 are Andalusian, according to the Active Population Survey (EPA) of the first quarter.

The local governments of Seville and Malaga also renounce part of the funds for the extra cost

In addition to having the largest number of unemployed this region has the highest proportion of low-skilled jobs, young people and workers in low-wage sectors, so the rise of the SMI will have a greater impact on this community than the rest from Spain. This is without taking into account that an economic slowdown ends up expelling workers from the labor market.

The City of Jerez has already announced that it will return just over half of the funds it has received from the Junta de Andalucía for the development of this year's employment plans, some 5.3 million of the 10.1 million initially allocated . This will mean that he will not be able to hire the 798 unemployed originally planned, but 551.

Jerez will return more than 5 million to the Board for the impossibility of facing the rise of 22.3% in the salary of the unemployed

The consistory has wielded that does not have economic resources to face all the part that corresponds to assume for the development of these programs, about 900,000 euros. The mandatory application of the minimum wage increase approved in December has caused the increase in spending on these programs of job placement to unemployed, which was not provided for in the funds allocated by the Andalusian Administration, then chaired by Susana Díaz. That gap, therefore, is having to be assumed by the consistories.

The local governments of Andalusia are waiting for the Administration directed by Juanma Moreno move sheet, taking into account that the Minister of Employment, Rocío Blanco, guaranteed the Andalusian municipalities the continuity and normal development of the current edition of the plans of employment, after the rise of the SMI, which affects, especially, one of the four contribution groups of workers who are going to be hired in these projects by the municipalities.

Since the Board has insisted that the current call for this initiative was practically resolved when the new Government took office, last January. However, they criticize the former executive of Susana Díaz for understanding that he did not resolve, in a timely manner, the effects of this increase in incentives. They say that it modified the regulations governing these plans last January, when the increase of the SMI was an accomplished fact, without contemplating any update in these amounts.

Impact on employment

The rise in the minimum wage and the increase in taxes on employment are barriers that have made hiring more expensive and will translate this year in which the Spanish economy will require a greater growth of activity in order to create jobs, unlike what had been happening in recent years. years. The affiliation data, the most reliable thermometer to measure employment, reflected a clear slowdown this week. Job creation grew at its slowest pace for a month of June since 2014, while stable hiring, which reflects the confidence of businessmen in the future, continues to fall freely. In the last year they have fallen almost 9%.

The creation of employment in June grew at the lowest rate since 2014

The economic literature is not clear about the impact that the SMI may have on the labor market, but in Spain there is a coincidence that the effect on employment is negative. They also believe Brussels and international organizations such as the IMF and even Social Security itself. The Secretary of State, Octavio Granado, acknowledged that there may be entrepreneurs who have "the temptation to hire instead of 20 workers to 18. It does not make sense for us to deny it," he said.

The Bank of Spain has been the most critical with forecasts that predict the destruction of 125,000 jobs, an estimate that provoked harsh criticism from the Secretary of State for Employment, Yolanda Valdeolivas, who accused the governor, Pablo Hernández de Cos, of provoking social alarm and lack of rigor, for which he demanded that he ask for forgiveness.

Another one of the quantifications of job loss came from BBVA Research. He calculated that the negative impact until 2020 could range between 75,000 jobs and 195,000. Said the economy already stopped creating 20,000 jobs in the first quarter of the year.

. (tagsToTranslate) city councils (t) employment

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