Austerity Measures

I've been hearing from U.S. colleagues about various measures taken by their employers to cope with the economic crisis. Everyone seems to have more work to do and less time to do it. Sometimes that is because colleagues have been laid off, or vacancies not filled. But more than one I know has chosen across-the-board furloughs of limited duration--designating previously paid holidays as unpaid holidays this year, or mandating five or more days of unpaid time to be taken during the current fiscal year. Such decisions have the effect of spreading the financial hardship around so that it hits everyone, and generally equally, or at least proportionally to their salary.

In an effort to avoid becoming "the next Greece," Spain announced austerity measures last week that sound drastic by any standard. Beginning in June, all civil service workers will take a salary cut, the total amount to be 5% of current expenditures. The plan is being implemented on a progressive scale, however. Lower-salaried workers (those earning up to 1200 euros per month) will take a 2.6 percent cut; higher-salaried workers will lose up to 8 percent. Non-civil service government workers stand to be cut by 15 percent. Even president José Luis Rodríguez Zapatero, who gets 5,000 euros a month (a bit less than $100,000 per year, by the way), will now only get 4,200.

Reportedly the reduced salaries will hit 2.8 million Spaniards, but those are not the only people affected by the measures. Pensioners payments, here-to-fore adjusted annually for inflation, have been frozen (though the lower value of the euro has been having a favorable effect on some us who bring money in from outside the euro zone). And unemployment in Spain continues at the astonishing rate of 20.5 percent.

An early snap poll on a news site showed positive results for the government economic measures: 100% approval. Results coming in later weakened support, and I've watched the figures slip to 86% in favor and now to 83%. It will be interesting to see what happens on June 2, also, when a general strike has been called by two trade unions for the public sector.

But in spite of how cost-cutting measures are affecting you, to me it still seems good to have a job.