FINANCE
The past seven years have seen subcontract labour and part-time contracts push the average salary down by over six percent
04.05.15 - 12:02 -
The percentage of workers earning less than the minimum wage has risen to nearly 43% :: SUR
The fall in salaries results in labour poverty, which affects 12 out of every 100 employees
There was a shocked reaction recently when it was revealed that the security staff who watch over the different rooms at the brand new Pompidou Centre in Malaga only earn 3.95 euros an hour (467 euros a month).
Unions and opposition parties were quick to describe this as unacceptable but apart from this specific case, in which the employers are a company subcontracted by Malaga council, it is worth looking at whether these figures, which have caused such a scandal, are an exception.
The answer appears to be no, they are not. Because if at the Pompidou Centre employees who have a Masters degree and speak several languages earn less than four euros an hour, in some hotels on the Costa del Sol you can find subcontracted cleaners who earn 300 euros a month less than colleagues who are directly employed by the hotels, or security staff at warehouses or office buildings who work 250 hours a month for 800 euros, or recently qualified IT technicians who programme software for companies on the Technology Park for less than 900 euros a month.
Despite statements to the contrary from Treasury Minister Cristóbal Montoro, salaries have dropped during the crisis. This has been corroborated by human resources experts, employment portals, unions and even the statistics issued by the tax authority, based on income tax returns.
According to these figures, the average gross annual wage declared by salaried staff in Malaga fell from 16,269 euros to 15,286 between 2008 and 2013: that is, 983 euros a year less, about six per cent. However, there is an even more striking statistic: during those five years, the percentage of salaried workers who declare an income which is lower than the minimum wage (9,034 euros a year or 646 euros a month) has risen from 34% to 43%.
Meanwhile, the percentage of the population earning between 645 and 1,290 euros a month has dropped from 29% to 24%. Curiously, the highest point of the salary pyramid has not become thinner, but has widened: two years ago, 3,791 people in Malaga declared income of more than 90,000 euros a year, compared with 3,458 five years earlier.
However, this drop in salaries is not only due to the fact that existing workers are being paid less - although that is so in some cases - but that the salaries for new staff have plummeted. The Towers Watson consultancy estimates that the pay for new employees has fallen by 20% in the past five years.
“It is worrying because at the moment there is no sign that this is stopping and, although the trend will change, it is going to take many years before people earn salaries which resemble those before the crisis,” says the director of salary surveys at Towers Watson, Eva Patier.
Salary differences
This fall in salary levels for new employees makes the gap between new and existing workers in the same company even greater. According to Jorge Guelbenzu, the general manager of Infoempleo.com, “Eight or ten years ago the salary offered by a company to new staff was often above the average for the same job in the same company, but now it is the complete opposite.”
This employment website calculates that the difference between salaries earned by those who already work for a company and newly-appointed staff can be more than 30 per cent in all professional categories.
“Those who have started a new job during the crisis have had to accept much worse conditions than they would have done if they had joined the company earlier, doing the same job,” says Eva Patier.
Of course, there are different situations. Sales representatives, for example, have suffered more severely from this reduction in salary levels than many others.
“They earn a lower basic salary and their targets have become more difficult to meet,” says Eva, who cites the case of medical representatives who have been particularly badly affected as they are now offered a salary which is about 40 per cent lower than it was before the crisis.
The difference has also been marked in the technological sector, especially for inexperienced staff. According to a survey carried out among software companies on the PTA, the gross salary earned by a junior programmer has dropped to 14,000 euros a year (less than 900 euros a month net). However, sources in the sector point out that these professionals quickly increase their earnings to at least 20,000 euros a year within three years.
The director of Arelance, a recruitment agency for this type of staff, adds that in this sector the trend is starting to reverse and workers are earning more than they did a year ago.
In Malaga, starting salaries have also fallen for other qualified personnel such as telecommunications engineers, because of the effect the crisis has had on some companies in the sector.
Teachers in private schools are now earning lower salaries because so many newly-qualified teachers are looking for work each year, and those who are qualified to teach the youngest children often earn less than 1,000 euros a month full-time because they are contracted as assistants.
The part-time trick
One of the factors in this drop in salaries is the increase in part-time contracts. Unions warn that in many cases these contracts are fraudulent, because the employees work full- time but are only paid a part-time salary. Waiters, shop assistants and cleaning staff are among those who suffer most from this practice. “In hotels, things are more or less controlled, but in restaurants, beach bars and cafés it is different,” says the general secretary for Commerce, Restaurants and Tourism of the CCOO union in Malaga, Lola Villaba.
“In most small businesses the employers do not respect the legal terms and conditions, salaries, rest periods, holiday entitlement or social benefits,” she adds, pointing out the prevalence of the black economy in this sector.
When considering the informal economy and low wages, those who look after dependent people deserve a special mention. CCOO says that workers who are contracted by the Junta de Andalucía are subject to conditions which are “almost worse” than those in the black economy.
This is fertile ground for labour poverty, which Eurostat defines as people who are in work but live in homes where the income is lower than 60% of the average income of all households. Twelve per cent of employees are in this situation, according to the latest INE report. The self-employed, temporary and part-time staff are those most at risk. “They’re creating work, but at what price?” asks Lola Villalba.
Outsourcing
Some years ago temporary employment agencies were the target for criticism from the unions, but in the past few years another phenomenon has appeared on the scene and caused them to redirect their concerns: the externalisation of services.
The clearest example of this is in companies which, instead of employing their own cleaning staff, subcontract another company to provide this service, which is responsible for supplying and paying the workers who do these jobs.
It is a system which is commonly used for cleaning work, maintenance, computer support and telemarketing, and one of the reasons it is on the increase is that it reduces wage costs, because the subcontractors have low collective labour agreements, which in some cases come close to the minimum wage.
In hotels on the Costa del Sol, it is becoming common for room cleaning services to be contracted out. As a result, says the general secretary of Commerce, Restaurants and Tourism of the CCOO union in Malaga, Lola Villaba, some chambermaids are earning 300 euros a month less than colleagues who are employed by the hotel.
“The official terms and conditions in the hostelry sector stipulate a salary of 1,000 or 1,100 euros a month, but the services companies apply the rate for cleaning shops and buildings, which is between 700 and 800 euros,” she explains.
Outsourcing has also become common in sectors such as technology, banking (one example is Applus, on the Technology Park, where more than 2,000 young people handle BBVA transactions) and airports.
According to Enrique del Rey of the Towers Watson consultancy, companies are not only turning to subcontractors to save labour costs, but in order to “lighten their own structures.”
Even public administrations are turning to this practice, he points out, such as Malaga City Hall with the new museums.
