The unemployment benefit reform approved by the Government last week has two main objectives. On the one hand, what was the main concern of the vice president and Minister of Labor, Yolanda Díaz, was expanding its coverage; and this has been achieved although it has a price. About 2.5 billion euros a year. The second objective, for which former first vice president Nadia Calviño fought the most, was to increase employability, to encourage recipients of benefits to join the labor market. Here the reform fails. These are two of the conclusions of the study presented this morning by Miguel Ángel García, from Fedea.
Let us remember that the recently approved reform includes changes to this subsidy, which is received when the unemployment benefit is exhausted, until now set at 480 euros. It raises it to 570 euros, although it decreases as time goes by, and with the important novelty of making its payment compatible with a salary for six months.
Fedea does not question the good intention of increasing employability, it even points to progress by stating that by allowing the collection of salary with a part of the subsidy for 180 days, the “strong disincentive that previously existed” is avoided when this option did not exist. However, he also adds that by collecting a smaller part of the subsidy as the time in which collection began increases, it reduces the incentive for those who have been unemployed for longer, who are the majority.
In addition, it also works against the fact that, since it is a very modest amount, it does not leave much room to stimulate a return to work by reducing it. More would be achieved by “tightening the search requirements and non-rejection of job offers”, something that is modified with the new rule, but not sufficiently according to Fedea.
Another weakness of the reform is the active employment policies, where the Government's declared intention to improve the employability of subsidy recipients "seems far from being fulfilled due to the imbalance between the very defined rights and the vaguely concrete obligations of the recipients of the benefits." benefits”, to which are added the deficiencies of public employment services to fulfill their role of guidance and intermediation.
Fedea goes further in his approaches and proposes a reform not only of this unemployment benefit, but of the contributory benefit itself. The aim would be to improve the financial amount but limiting the period to 12 months, after which the subsidy would come into action for a maximum of 18 months and if the person remained unemployed, they would receive the Minimum Living Income. A radical change that does not seem to be among the Government's plans.
Regarding the cost that the application of the unemployment benefit reform will have, Fedea's calculations are that for every 100,000 new beneficiaries, with an average amount of 510 euros per month, spending increases by 612 million per year. If we work with the Government's hypothesis of 400,000 new beneficiaries, financial needs would increase by 2.5 billion euros per year (0.17 points of GDP).
Expense increases because there are new potential beneficiaries, by including those under 45 years of age without family responsibilities and agricultural workers, the increase in the amounts and in some cases the duration of the benefit.
