Monday, November 23

Labor raises incentives of up to 7,500 euros for indefinite contracts

Queue in front of the Treball office in Barcelona's Gòtic, in a file image

Queue in front of the Treball office in Barcelona’s Gòtic, in a file image
Ferret Nadeu

The Ministry of Labor prepares a package of incentives for job creation and the hiring of groups with particularly high unemployment rates at present, such as young people, women or veteran workers. To do this, the department led by Yolanda Díaz has transferred this past Tuesday to employers and unions a first proposal that includes incentives to companies that sign indefinite contracts worth up to 7,500 euros per contract. This is how EL PAÍS has advanced and EL PERIÓDICO has been able to confirm it from sources from the Ministry of Labor. Active employment policies aimed at hiring have moved in recent years a budget close to 2,900 million euros.

Labor, CEOE, CCOO and UGT began this Tuesday the social dialogue table on active employment policies, with the focus on reducing some of the structural deficits dragged by the Spanish labor market. And is that the economic crisis caused by the pandemic has aggravated unemployment rates among groups such as young people, where the unemployment rate among those under 25 years old once again exceeded 40%. Also among women, since since February unemployment has grown by 307,213 unemployed and now exceeds 2.2 million. Or about the long-term and veteran unemployed, since the latter already exceed 1.3 million affected.

The scheme transferred by the Ministry of Labor to social agents prioritizes permanent hiring, which since the start of the pandemic has suffered a notable contraction. In the first ten months of 2020, an average of 130,560 permanent contracts per month have been signed, 29.4% less than the average for the same period of the previous year. To try to reverse it, Trabajo raises subsidies of 4,000 euros for those companies that sign an indefinite first, a figure that can rise to 7,000 if the person hired is a woman, over 45 years old or identified by the SEPE as vulnerable due to their situation of income.

In Spain, the premium hiring is traditionally temporary, with an average of 1.3 million contracts per month. In order to try to convert part of this flow of contingent into permanent ones, the Work proposal contemplates incentives of between 4,000 and 7,500 euros, depending on the person hired and the conditions of the contract.

The more specific you help, the better

Labor’s approach, in the absence of modeling it with the consensus of employers and unions, follows part of the recommendations recently made public by the Independent Authority for Fiscal Responsibility (Airef). The entity chaired by Cristina Herrero analyzed the effectiveness of the aid and incentives for hiring in Spain during the period 2012-2018 and determined that their effectiveness increased significantly the more specific they were the same. He also especially highlighted the need to prioritize vulnerable groups, especially young people, as reflected in Yolanda Díaz’s approach.

The Ministry of Labor presented last week the master lines of the draft General State Budget for its department, which included an item of 6,482 million euros for the year 2021. Part of these millions may end up being used to pay for the program of new incentives that is under discussion at the social dialogue table. According to Airef in its recent report, the average expenditure in recent years dedicated to this item was 2,900 million euros.

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