If policymakers care about motivating people to work, they should focus on raising the minimum wage and giving workers a voice in decisionmaking.
Despite disappointing election results, Podemos party leader Pablo Iglesias has had an impact on his country’s political landscape and vows to continue to fight to reverse extreme inequality.
After weaker than expected results in Sunday’s election, Pablo Iglesias, leader of the Spanish Podemos Party, vowed to continue to push the young party’s ambitious anti-inequality and anti-austerity platform.
Podemos and other smaller leftist parties in the coalition “Unidos Podemos” had been widely expected to come in second in the June 26 vote. Instead, in the aftermath of the UK’s destabilizing Brexit vote, the upstart party placed third after the two that have taken turns governing the country for four decades – the right-wing Popular Party (PP) and the center-left Socialist Workers Party (PSOE).
The PP received 33 percent of the vote, while the PSOE received 23 percent and Unidos Podemos 21 percent. With no party winning a majority, negotiations will now begin to see whether any of them will be able to attract enough coalition partners to govern.
Whatever the outcome, Iglesias declared that with their strong support among young people, “Spain’s future will involve Unidos Podemos.”
Iglesias, 37, helped found Podemos just two years ago as an outgrowth of Los Indignados (“The Outraged”). This group of mostly young protesters rose up to demand radical change in the face of the country’s skyrocketing unemployment and harsh budget cuts.
Spain has had the second-highest increase in inequality of any OECD since 2007. The jobless rate is 21 percent nationally and over 45 percent for youth 25 and under.
If they could gain power, how would Iglesias and Podemos plan to tackle the country’s extreme levels of inequality? The Podemos party platform has garnered a lot of publicity for its clever design. In the form of an IKEA catalog, Iglesias and other party leaders are featured watering plants and slicing cheese, alongside some of their key policy priorities. But the media outside Spain have paid scant attention to the details of the party’s inequality-related proposals. Here are some of the highlights:
- Increase the top marginal tax rate to 55 percent for those earning over €300,000 (US$340,000).
- Apply a wealth tax on holdings of over €400,000 (compared to €700,000 currently), excluding the value of first homes. Measures will also be taken to close loopholes that have practically eliminated the inheritance tax in some regions of Spain.
- Impose a one-off solidarity tax on private financial institutions to recoup the cost of public subsidies.
- Advance an ambitious financial transaction tax based on the European Commission’s proposal for a tax of 0.1 percent on stock and bond trades and 0.01% on derivatives trades.
- Advocate for an international treaty to eliminate tax havens.
- Audit the country’ crushing national debt and restructure the terms of this debt to alleviate the burden on ordinary Spaniards.
- [pullquote]The Podemos Party’s commitment on inequality has already reshaped the Spanish political landscape.[/pullquote]
- Launch a €15 billion social welfare and economic modernization plan including a “renta guarantizada” (guaranteed minimum income). This will be complementary to existing income for households below the poverty line. The initial amount will be €600 per month for living units of one member, with an additional 35 percent for a second household member, and 20 percent of that for each subsequent family member up to a total of €1,290. There will also be income support for low-wage workers that guarantees a minimum of €900 per month.
- Seek reform of the EU Stability and Growth Pact, which is the core of the austerity measures imposed on Spain that have exacerbated poverty and unemployment.
- Increase the minimum wage from €70 per month (US$856) to €800 initially and then to €950 within four years.
- Reverse health and education cuts and labor law reforms that have weakened collective bargaining rights.
- Lower the retirement age from 67 to 65 and provide pension rights to immigrants.
- Provide universal access to health services, including for immigrants, and guaranteed access to basic services, including the right to heating, light, and water. Suppliers will no longer be able to cut off utilities for poor people who can’t afford to pay bills.
- Oppose the proposed U.S.-EU trade agreement, the Trans-Atlantic Trade and Investment Partnership.
Given the election results, Podemos will likely remain an opposition party for the near term. But the party’s commitment to tackling inequality (and that of the Indignados movement from which it sprung) has already reshaped the Spanish political landscape. In 2011, both major parties defended a program of budget cuts that increased inequality. Now, the right-wing PP is the only one of the four major parties that still advocates such austerity measures – and it will not be able to govern the country alone.
Oscar Reyes is an associate fellow at the Institute for Policy Studies and is based in Barcelona.