It is the confrontation between Excel and ideology, between those who exhibit data and calculations and those who prioritize expanding coverage, two sides that exchange reproaches. It is not the war, but the tension, one more, between two economic vice-presidents of the Spanish Government, the first and Minister of Economy, Nadia Calviño, and the second and Minister of Labor, Yolanda Díaz. This time, the conflict has erupted following the reform of the unemployment benefit, an issue on which the two ministries have been working for more than a year, with a project that was to be discussed in the spring, but that the call of early elections was loaded. Now, what is surprising is the virulence of the dialectical confrontation, fueled also by the rush to close the reform before the end of the year, in order to opt for a new payment of the recovery funds.
In the Ministry of Economy, true to their style, they use Excel and data, with a model for reforming the unemployment benefit that, they say, can create 340,000 new jobs in two years, 194,000 of which from unemployment and 144,000 inactive. A reform that is based on three pillars: the increase in incentives, which would mean 216,000 new jobs; the reinforcement of the Activity Agreement, with 92,000 additional jobs; and the simplification of subsidies, which would provide the remaining 30,000 jobs.
The bulk of this new job creation would be through the first pillar, the increase in incentives for the unemployed to actively look for and find a job, which could provide the 216,000 new jobs, a little more than half from unemployment and the rest inactive.
The formula would be launched and would make it possible to match the allowance and salary over a long period, a year or more. A clearly decreasing subsidy, which could start at 600 euros and end at 300, as a basis to stimulate reintegration into the labor market; and that it would be compatible with a job, and therefore, with the perception of a salary equivalent to or slightly higher than the interprofessional minimum wage (SMI), currently set at 1,080 euros. For the Ministry of Economy, this is the key element, making allowances and wages compatible and stimulating the active search for a job. Since the approach is to add a supplement to support employment, it could be possible to triple the income at first, according to Economia.
They also provide for the reinforcement of the Activity Agreement, the verification and control mechanisms, which would add 92,000 new employees; 54% from unemployment and 46% from inactivity. Spain has harsh penalties for breaching the conditions to receive the subsidy, but also weak verification, which devalues ??the effectiveness of the system.
The third leg of the economic reform is the simplification of the current system of subsidies, with the transfer of a part to the minimum vital income. In this way, they calculate the creation of 30,000 new jobs.
This reform would also mean savings for the public coffers, because, if expectations are met, by significantly increasing the number of people working, the contributions will also increase, with which around 2.2 billion euros would be achieved additional income in the two years in which the calculation has been made.
“The variation in income is the important thing as an incentive”, they point to the Ministry of Economy. If there is no room for savings at the lowest salary level, the level of consumption must be adjusted with each decrease in income, and in this way the search for one is encouraged.
The approach of this reform is also based on the comparison with the experience that has existed in other countries, where the introduction of the compatibility of the benefit and the subsidy has meant a substantial improvement in the coverage rate, which indicates the proportion of unemployed people who are beneficiaries of a benefit. In Germany, Italy and France it can be seen that, when compatibility elements are introduced, the coverage rate increases and, at the same time, structural unemployment decreases.