About that Austerity in Spain: There Isn't Any

I have long contended there is little austerity in Spain and there certainly isn't much reform either. I now have some numbers to back that up.

Via Mish-modified Google-translation from El Economista, please consider personnel costs rise despite full state salary freeze.

Despite the 5% snip in public salaries in 2010, the subsequent wage freeze in 2011, the elimination of extra pay in 2012 and the current freeze in Administration salaries, the overall payroll became cheaper by a only 2.1% year-over-year to December last year.

The budget of expenses and monthly payments, which has been updated recently by the General Comptroller of the State Administration (IGAE), casts doubt on the effectiveness and / or proportionality of adjustments labor.

For example, until the end of May, the state paid 14.17 million euros to its temporary staff, an increase of 9.5% over last year.

This upward trend in payments to temporary staff is constant from the beginning of this exercise. since, January 31, 2013, these state payments increased 21.3 percent (4.13 million total) about 3.4 million higher than the same month a year earlier.

It may seem paradoxical, but in the last two two years, the State Administration has virtually the same costs for temporary staff. What it cut one year, it added back the next, in nearly the same amount.

Similarly, spending on senior positions in May 2012 was 29.7 million euros. It is now 29.86 million euros, an increase of 0.5%.

According to the General Comptroller, remuneration to civil servants decreased 2% from a year earlier.

However, despite this saving palpable in payrolls of officials, the State has not been able to lower their personnel costs, since payments until May totals amounted to EUR 10.184 million (10.139 million last year) , an increase of 45 million, representing an increase of 0.4%.

When Keynesian clowns point to Spain and say "austerity doesn't work", ask them "where is the austerity?" Also ask "where is the labor reform?" Then ask "where is the pension reform?"

Then kindly point out there is little to no austerity, and little to no reform, but there has been massive tax hikes, exactly the wrong thing to do.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com