American “Squeeze the Workers” Spreads to Europe

This cannot be good news, at any level…

In 2008, 1.9 million Portuguese workers in the private sector were covered by collective bargaining agreements. Last year, the number was down to 300,000.

Spain has eased restrictions on collective layoffs and unfair dismissal, and softened limits on extending temporary work, allowing workers to be kept on fixed-term contracts for up to four years. Ireland and Portugal have frozen the minimum wage, while Greece has cut it by nearly a fourth. This is what is known in Europe as “internal devaluation.”

Spain Unemployment

While most of the debate over Europe’s response to the financial crisis has focused on the budget austerity enveloping the Continent, the comparatively unheralded erosion of worker protection is likely to have at least as big and lasting an impact on Europe’s social contract.

“It has a disastrous effect on social cohesion and a tremendous effect on inequality,” argued Jean-Paul Fitoussi, an economics professor at the Institut d’Études Politiques de Paris. “Well-being has fallen all across Europe. One symptom is the rise of extremist political parties.”

UPDATE:

On Monday, Ikea started taking applications for 400 jobs at the new megastore  near Valencia store, due to open next summer.

The company wasn’t prepared for what came next.

Within 48 hours, more than 20,000 people had applied online for those 400 jobs. The volume crashed Ikea’s computer servers in Spain.

“We had an avalanche of applicants!” Ikea spokesman Rodrigo Sanchez told NPR in a phone interview. “With that quantity, our servers just didn’t have the capacity. They collapsed. After 48 hours, we had to temporarily close the job application process. We’re working on a solution, to reopen the as soon as possible.”

That initial volume alone gives applicants a 1-in-50 chance of landing the job — three times more difficult than getting into Harvard last year.

And to complement  Porter’s reporting, Jared Bernstein helps out on the minimum wage policy debate.

I can’t open the paper these days without stumbling onto something about the minimum wage, which I take to be a good thing as it’s a simple, popular way to help address the problem of very low-wage work in America.  It’s not a complete solution; it’s not the only solution — it is, in fact, a relatively small-bore policy that sets an important labor standard: the government will compensate for the severe lack of bargaining clout among our lowest-wage workers by setting a floor below which we won’t allow their wages to fall.

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