http://www.ft.com/intl/cms/s/0/9c2c864c-742f-11e2-a27c-00144feabdc0.html#axzz2KihaIslX
This article by Tony Barber at the Financial Times highlights how the the Spanish auto industry is starting recover and create thousands of new jobs thanks to wage increase limits and revamped working conditions. Although, according to Mr. Barber, this will not make much of a dent in Spain's 26 percent poverty rate, it is a sign that the nation's economy is recovering quickly. While the labor market is not the only factor in economic reform and will not necessarily provide long-term economic prosperity, should other struggling European nations mimic Spain's labor negotiations?
I think countries should try and mimic Spain's labor negotiations because the main point is that its creating thousands of jobs. I feel like overtime with more jobs and more money being circulated in Spain's economy, the poverty rate will slowly, but surely, be impacted in a positive manner. This in turn will increase the money supply and income of families and that creates room for spending.
ReplyDeletei think that this could be a solution that other struggling European nations could use, as the article states that because of this jump start in the auto industry,"Spain (is)an increasingly competitive location for manufacturing and exporting cars." This could help their economy in the import/export game and jump start job creation. Although I don't believe this increase in the labour market is going to solve all of Spains issues, but it is somewhere to start...
ReplyDelete"Economic reform does not, however, begin and end with the labour market." They need to start somewhere... who knows what other ideas they could come up with. In a struggling economy, any solution sounds like a good one.
I agree that the creation of jobs is a good first step for Spain. They are at a point that anything that helps is crucial. There aren't many risks in creating jobs so I am encouraged by this news. They shouldn't become complacent but I highly doubt that will happen anyway.
ReplyDeleteThis is a great new not only for Spain's economy but also for Europe's economy. For a long time, Europe has been struggling to find a solution to get out of debt and recession. However, Spain's creation of jobs and labor negotiation will help other European countries take action to recover the economy.
ReplyDeleteThis article interested me for the fact that I will be going to Spain in the spring for Study abroad. Im curious to see if Spain is going to continue to make progress or if this is just a temporary thing. I think that if car companies continue to increase their production due to the low labor costs that things may turn around in Spain Hopefully other struggling nations in the EU will see this success and model their recovery plans off of what Spain is doing. I hope that this increase in employment will lead to less crime in places such as madrid.
ReplyDeleteIts good news for Spain and the economy needed a kickstart from somewhere. Spain's economy have already hit the trough in the business cycle, so over time we can expect to see more jobs not just only in automotive but also in other sectors. Labor negotiation is necessary in all the struggling European economies but they should be careful in the way they approach it because the way Spain approach labor negotiation might not work for other countries as the factors in each place are different. However, as pointer out by the article, "If the eurozone is to survive and prosper, so the thinking goes, the solution lies not just in more rigorous fiscal discipline and tighter bank supervision but in structural reforms aimed at boosting long-term growth rates."
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