With regard to working conditions, the Spanish government's emphasis is on increasing flexibility, deregulation, and training programs. Compared to American standards, some say that the labor law is inflexible and discourages new hiring. Also, many consider the severance payments to be very high. Compared to the rest of the EU, the Spanish labor market is one of the lowest-paying and precarious. More than 35 percent of the work-force is actually on temporary contracts which are generally low-paying and can be canceled unilaterally any time by employers.
The government pursued 2 major Labor Market Reforms to achieve this flexibility. The first was in 1994 under the socialists and the second in 1997 by the Popular Party. Both reforms rescinded the rights and guarantees enjoyed by workers as originally framed within the Workers' Statute (ET) of the early 1980s. The reforms to the ET included allowing temporary contracts, opening space for private companies (agencies) to place temporary workers, introducing low-paying apprenticeship contracts, scrapping concepts such as extra pay for overtime work or a 40-hour work week, decreasing severance costs, and allowing employers to move workers between different functions and geographic locations.
The government pursued these reforms with the participation of the main business organization, CEOE (Confederación Española de Organizaciones Empresariales, the Spanish Employers Organization), which reflects the increasingly marginalized role of trade unions. Trade unions of the early 1980s actively participated in the formulation of the Workers' Statute. Originally the UGT was affiliated with the socialists and CCOO to the communists, but both unions distanced themselves from the parties. Although they have been cooperating with each other more closely since, membership in both unions is low (estimated to be around 15 percent of active workers) and their role in collective bargaining has diminished, especially since the labor market reforms of the 1990s. As a result unions are hampered by organizational and financial weakness, which reduces their ability to negotiate.
With unemployment at 16 percent today, it is one of the highest in the industrialized world. It is therefore not surprising that this issue continues to dominate the government agenda. Unemployment is highest in Andalucia, Extremadura, Ceuta, and Melilla. Catalonia and Madrid enjoy the highest employment figures. The reasons behind the high unemployment rate are the decline in agricultural employment, inadequate skills of the labor force, small companies' difficulties in an increasingly competitive environment, and previously high inflation. Some economists estimate that the black market actually employs some 10 percent of the active population, mostly younger workers with few qualifications to enter the regular labor market.
The presence of women in the Spanish labor market is below European average even after increases in the 1980s and the 1990s. In rural areas women always participated in agricultural work and in urban context they are concentrated in manufacturing (textiles, leather, footwear) and services (retailing, hotels, restaurants, catering, public administration, education, health services, domestic and personal services). The presence of married and older women in the labor market is increasing, and legislation to prevent discrimination is among the most progressive in western Europe. Since 1989 women are offered 16 weeks paid maternity leave. Despite legislation, inequalities remain; women's unemployment in 1996 was 30.4 percent and women's work contracts tend to be either part-time or temporary. An average woman earns 72 percent of the average man, and women are underrepresented in the higher status occupations. A significant exception to this trend remains the fact that many scientists in Spain, especially in natural science, are female. The state's Council for Scientific Investigation has a slight female majority.