Despite significant internal disagreements, extant arguments regarding labor market politics in Spain commit two fundamental errors. First, they claim that the politics of labor market reform revolve around efforts to resist or impose orthodox measures of labor market liberalization. This paper will show that proponents of neoliberal-style deregulation play a decidedly secondary role in Spanish labor market politics. Second, they rest on relatively unsophisticated conceptions of the coalitional bases and institutional logics underpinning these politics. Spanish labor market regulation is conditioned not only by the preferences of employer associations and unions, but also by other corporatist interests both inside and outside the complex, multi-tiered labor market bureaucracy: actors with considerable veto power threatened by fundamental regulatory change. However, these regulations are relatively porous; absent a full appreciation of how firms manage comparatively restrictive rules and workers manage market risks, the relative stability of Spanish labor market regulation in comparison with other EU countries makes little sense.
Spain presents a particularly challenging set of conditions for students of labor market politics. No other advanced economy exhibits such extremes of booms and bust in employment creation and destruction; no European economy has rates of temporary employment even approaching Spanish levels; and yet, few European countries have witnessed less change in the formal structure of labor market regulation over the last two decades.
This paper will specify the mechanisms—institutional, coalitional and ideational—that have made Spanish labor market politics so resistant to demands for wholesale neoliberal reforms (indeed, reforms of any kind), outline the extent to which these mechanisms obscure real changes in the way Spanish labor markets are effectively regulated and reflect on the lessons of this experience for the comparative study of regulatory reform.
