The case of temporary contracts in Spain.Worth it?

Discussion in 'Economics' started by Rona1d, Dec 16, 2010.

  1. Rona1d


    Spain has been screwing around with temporary contracts at an ever growing rate since its inception into the euro zone, and now its gone to bite Spain in the butt. Being pro cyclical, temp contracts inflate any growing economy, and crush any shrinking one.

    The case for temporary contracts is this: Allows companies to hire and fire basically at will, with none of the drawbacks that anchor permanent contracts. Ideal for companies in need of low skilled workers, to satisfy a growth in demand. Ideal for a country like Spain, because of Spain's ever growing immigration of low skilled workers into their borders, in need of jobs.

    Drawbacks: Benefits of having workers on permanent contracts for businesses: over time, their productivity increases at a fairly reasonable rate. For economy, if, for example, your ever burgeoning housing market collapses (hence Spain), and the construction industry is basically built off of temporary contracts, then the government has to now deal with hundreds of thousands of people unemployed, demanding welfare, which does not go well with the budget deficit.

    What do you guys think? Should Spain kill temp contracts
  2. Difficult question... There's positive aspects to both ways and, as usual, the truth is somewhere in the middle.
  3. How about you shorten unemploymnet benefit. In some parts of Europe you can stay unemployed for two years with 60 % + of your salary. I am all for a safety net that gives you an income no matter what. But if you had a high paying job there is no reason to still get a big chunk of your salary when you get unemployed.
    People should quickly get welfare checks and that's it, so they would save more , use less debt and it would cost less to the govt.