Spain Braces for Nationwide Protests Over Proposed Workweek Reduction

Trade unions in Spain will protest to pressurize the government and businesses into agreeing on a proposed reduction in working hours. The government offers small business incentives to counter employer resistance. Spanish and EU leaders face a productivity challenge, compounded by concerns over potential labor cost increases.

Trade unions are set to lead mass protests across Spain on Thursday, demanding an agreement between the government and the business sector for a reduction in working hours, amidst employer concerns over rising costs.

Prime Minister Pedro Sanchez's Socialist government is advocating for a 2.5-hour reduction in the 40-hour workweek, predicting it will improve productivity. The European Union needs to close the productivity gap with the US and China, former European Central Bank chief Mario Draghi emphasized in a recent report for the European Commission.

To win employer support, the government is offering a hiring bonus for small businesses with fewer than 10 employees to offset the shorter workweek while maintaining service levels. The government may enforce these changes unilaterally by the end of 2024 if consensus is not achieved.

The proposed calculation of working hours on an annual basis aims to mitigate adaptation challenges in sectors like hospitality. Spaniards work more hours than most Europeans, with an average weekly work time of 36.4 hours in 2023, compared to the EU average of 36.1 hours.

Labour Minister Yolanda Diaz believes reducing working hours will enhance productivity, where Spain has traditionally lagged. However, business owners are concerned that the proposal will result in employees working less for the same wages, increasing labor costs.

The impact of such measures in other countries remains mixed. France's 2000 introduction of a 35-hour work week aimed at creating jobs but resulted in higher labor costs, making French workers more expensive and companies less competitive.

(With inputs from agencies.)