Editor’s note: This article was first published in January 2013, in the middle of Spain’s post-2008 jobs crisis. Its forecast that no jobs will be created “for a long time” reflects that moment.
Spain’s future lies with entrepreneurs. If you can’t find a job, make your own way, because jobs aren’t going to be created for a long time. In fact, the way things are going, I’d venture to say that every new self-employed worker will directly destroy a salaried job, and that self-employed worker won’t be exactly what we mean by an entrepreneur.
The labor market as we know it is disappearing. Companies’ new cost-containment model is based on cutting fixed costs, and a large part of a company’s workforce sits within those fixed costs. Many companies’ strategy is to lay off an employee and have that same person keep working for them, but as a self-employed contractor. In other words, the company gets rid of the cost of that person’s social security contributions, then subcontracts their services and lets them pay for their own coverage.
This is the kind of working relationship taking hold in Spain. ElDiario.es called it a country for entrepreneurs, although, honestly, these self-employed workers will be slaves to the new system rather than entrepreneurs. They give up a fixed salary as employees to be paid by the job, as long as there is work. Some months they’ll earn more, some less, and in others they won’t even cover their expenses.
For the company the advantages are very clear: this kind of worker (who is not an entrepreneur) doesn’t get sick and doesn’t go on strike. The company becomes much more competitive because it no longer carries those “permanent staff costs.”
See also: The new entrepreneurs in the United States: a problem for politicians and economists
This is what is happening in journalism, where thousands of journalists are laid off and then offer their services as freelancers. If a company installs air conditioning or security systems, it wouldn’t need a permanent team of installers. It would be enough to call a self-employed installer who charges a fee per installation, and if that installer is a former employee who already knows the company’s way of working, so much the better.
The problem with this new working relationship
The biggest problem is that when people say Spain’s future lies with entrepreneurs, they usually say it because entrepreneurs create jobs. The new self-employed, on the other hand, work for themselves, hire nobody and sometimes barely get by, having to accept whatever these companies pay, because if you don’t accept it, someone else will.
Yes indeed, a country of entrepreneurs.
Further reading
- New job opportunities online: there is work here
- What is the perfect business or job for me? How to decide what to do
- 15 questions to evaluate your business idea
Featured image: Sid Mbog, CC BY-SA 4.0, via Wikimedia Commons.
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