It’s a clash between Labor Minister Yolanda Díaz and Economy Minister Carlos Cuerpo.
A push to shorten workers’ work hours is causing a rift in Spain’s governing coalition, fueling accusations that Economy Minister Carlos Cuerpo is trying to sideline the proposal.
Socialist Prime Minister Pedro Sánchez had promised he would cut the work week to 37.5 hours from 40 hours as part of an electoral deal with his coalition partner, the left-wing Sumar party. Now, an internecine fight within the government risks derailing the measure.
The initiative could have a significant impact on Spain’s productivity and international competitiveness, issues at the heart of an anguished debate over Europe’s economic future. The government insists it will help productivity, while business is unconvinced.
Last year, the labor ministry — under the leadership of Sumar Minister Yolanda Díaz — began a three-way consultation process together with labor unions and employers, aimed at drafting a concrete proposal. Representatives of private business walked away from the meetings, protesting what they said was a top-down imposition that would hurt small business the most. Talks continued without them, and the government and labor struck a deal late last year.
There were already signs of trouble in the run-up to the deal, with Sumar and the Spanish Socialist Workers’ Party (PSOE) disagreeing over how the reform should be phased in and how it should apply to part-time workers.
In an unusually open bout of criticism, at the start of the month Díaz lashed out against Cuerpo, accusing him of being “almost a bad person” for interfering with the draft proposal. The row escalated after Cuerpo failed to include the draft text for discussion at a meeting of the government’s economic and social council, an advisory body that is a necessary stepping stone for discussion in the Cabinet.
“We have closed [an] agreement with the unions that must be respected and complied with, which is being blocked” by the Socialists, Díaz said at the time.
Cuerpo says the reform remains a priority for the government. Díaz and Cuerpo met on Wednesday. A government insider said that they agreed the proposal would be added to the agenda of the next meeting of the commission for economic affairs on Jan. 27, a necessary step before discussion in Sánchez’s Cabinet.
The two left-leaning parties run a minority government and rely on a handful of other, smaller ones to pass legislation on an ad hoc basis. These include more business-friendly regional parties such as the Catalan Junts and the Basque Nationalist Party (PNV). Spanish media report that those two parties remain unconvinced, meaning that the government could face a damaging defeat in parliament and a blow to its fragile authority if it seeks a vote without adequate preparation.
Win for the workers
Spaniards work a little over 36 hours a week on average. According to European Union data, that puts them around the middle of the European ranking, putting in four and a half more hours a week than Germans, for example.
Since the pandemic, the Spanish economy has been a rare bright spot in Europe, growing well ahead of its peers. Wages, however, have not caught up. According to the Organisation for Economic Co-operation and Development, real wages in Spain in the first quarter of 2024 were still below where they were before the pandemic, putting it near the bottom of the table for advanced economies over that time frame.
By keeping salaries steady while cutting work hours, a shorter week amounts to a de facto raise. The measure has a broad buy-in from the public. Two out of three Spaniards back a shorter working week, according to a poll published in September.
Private business is more skeptical. Spain’s Spanish Confederation of Employers’ Organizations (CEOE), one of the two industry groups that walked out of the three-way talks, warns that the measure will cost companies between €21 billion and €23 billion in extra costs this year if implemented.
Rosa Santos, the director of CEOE’s labor division, maintains that the organization is not opposed to shorter work hours, but that this should be done though sectoral collective bargaining agreements, which can be tailored to each industry’s specific needs.
“The impact is very uneven: by sector, by geography, by company size,” said Santos.
Pablo Simón, a political scientist at the University Carlos III of Madrid, said he thought that Sumar and the PSOE would eventually reach a deal on the reform, but noted that Sumar is under greater pressure: Opinion polls show its support has nearly halved since it won 15 percent of the vote at the last election in 2023.
“The smaller partner is in a difficult situation because it doesn’t have the capacity to go to elections,” Simón said.
