In Spain, the cost of labor is rising at a rapid pace, sparking battles between workers and their employers over wages. As a result, the country?s unemployment rate is also rising at a rapid rate ? faster than any other developed country. At issue, is the fact that many wages in Spain are tied to inflation indexes, meaning that as inflation increases, wages do as well. Businesses are now looking to stop this practice, but unions are asking for a 2009 increase of more than 2%. Bankruptcy filings in Spain have increased 200% since last year alone as the global economic recession takes its toll on Spanish businesses. Meanwhile, the government is determined to stay out of the matter ? leaving negotiations over wages to businesses and unions.
See "Spanish wage jump fuels union-employer fight", Andrew Hay, March 12, 2009