“Economy of fear” invades Spain

By SAPA Time of article published Feb 14, 2012

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Spain's record unemployment is expected to start declining gradually from 2013 onwards, but its effects - including the emotional ones - could shape society far into the future.

High and persistent unemployment in Spain and other European countries is creating a generalised atmosphere of fear that is changing attitudes towards work and labour markets, some analysts believe.

People are so afraid of losing their jobs that they are willing to accept a constant erosion of their working conditions, economist Fernando Luengo told dpa.

There is a “fear of losing what we have” that has extended through Europe, he said.

Spain has an unemployment rate of nearly 23 per cent - the European Union's highest, and more than twice its average. Among people younger than 25 years, almost every second is out of work.

Every morning, Spaniards hear more news about recession, spending cuts, uncontrollable budget deficits, soaring borrowing costs and other economic woes making them feel that “everything around us is a total horror,” commentator Jose Manuel Atencia wrote in the daily El Pais.

Forty-five per cent of the work force fears unemployment, according to a 2010 study. Some of those still having jobs are so worried about getting sacked that they no longer take their annual holidays, according to press reports.

In the north-western region of Galicia, the number of abortions increased by 24 per cent in 2009 - a development which women's groups and trade unions linked with a female fear of unemployment, the newspaper Faro de Vigo reported.

The number of people taking sickness leave has meanwhile dropped in Spain. In 2010, 24 out of every 1,000 employees paying social security contributions were recorded as having taken an official leave for common illnesses. That was down from 30 workers in 2007, according to social security statistics.

In normal circumstances, such changes could signal that work motivation is on the rise.

But while a certain amount of anxiety is known to be necessary for a good performance, too much of it “blocks creativity and talent,” which is what companies want from their employees, said Pilar Jerico, author of a book on fear and the business environment.

“Fear paralyses, provokes errors,” labour psychologist Pep Font said.

At a lighting company near Barcelona, 43 out of the 220 employees are about to be fired, El Pais reported recently.

“It is really tough going to work with the knowledge that you could be next. There is an atmosphere of anxiety, fear, anger,” said Paco Lopez, one of the employees.

“We are prepared to do anything but to lose our jobs,” he said.

Unemployment is often the catalyst making a family join Spain's nearly 12 million people classified as poor or at risk of becoming poor, according to figures given by the European Anti-Poverty Network. Spain has a total population of about 45 million.

Some companies make use of the fear, pressuring their employees into working longer hours for instance by threatening to dislocate to cheaper countries, said Luengo, one of the economists behind the critical website EconoNuestra.

A study of eight companies present in Spain showed that six of them were now linking pay with productivity, Luengo said.

“Fear has always been a faithful ally of the powerful,” said journalist Joaquin Estefania, author of a book La Economia del Miedo (The Economy of Fear).

Mainstream economists, however, see liberal reforms giving companies more power over working conditions as a way out of an economy of fear.

A labour market reform announced by Spanish Prime Minister Mariano Rajoy's government last week slashes severance pay and makes it easier for employers to modify working conditions, including salaries.

A more flexible labour market will encourage employers to hire more people, galvanising Spain's stagnant economy and creating jobs, the reasoning goes.

The reform simultaneously tries to reduce the number of temporary work contracts, which make up about a quarter of the total.

The government's arguments did not convince the opposition Socialists, who accused it of undermining social rights. Trade unions are meanwhile considering a general strike. - Sapa-dpa

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