What happens when government goes too far in protecting workers from changes in the market economy? Ask Spain.
The Polos are a typical Spanish family ? unfortunately for them and for the European economy. Jes?s, 59, has worked as an accountant at an electrical-parts supplier for 20 years. His job is protected by the extensive rights awarded to the Spanish permanent employee. By his estimate, his employer would have to shell out as much as $120,000 in mandated severance payments to lay him off, a prohibitive expense that likely gives him a job for life. Jes?s’ daughter Maria, 28, works for a Madrid hotel chain, on a series of temporary contracts, some of which have lasted as few as six days. When each one expires, she can be sent off with next to nothing. Maria says her employer has told her outright that it would be too costly to offer her a contract similar to her father?s.
As the TIME article containing that passage suggests, employers unable to adjust their work forces to market changes are less likely to add employees.
Those pushing for increased unionization in the American economy might want to keep this example in mind.
