last spring Spain hung a gold medal that is not Olympic and, in reality, nobody wants. Specifically, we surpassed Greece as the champion of youth unemployment in the European Union. In addition to being well above the average youth unemployment rate in the countries of the OECD (Organization for Economic Cooperation and Development), the club of the most developed economies. Specifically, the unemployment rate among those under 25 years of age reached 37.1% in June, according to Eurostat. The Greeks who, until April, topped this ranking, registered in July a rate almost seven points lower than the Spanish (30.4%). For its part, according to a study by the Círculo de Empresarios based on data from the OECD report ‘Employment Outlook 2021’In April of this year, the OECD countries registered an average unemployment rate among those under 25 years of age of 14% by 38.8% of the Spanish rate. Specifically, this rate grew 7.6 points during the worst moment of the pandemic (April 2020) reaching 19% and up to 10 points in the case of Spain climbing to 42% (June 2020). As this international organization recalls, this rise “is more than three times the growth in the unemployment rate of workers over 25 years old.” Thus, the Covid crisis has hit those who entered the labor market during the pandemic and were unable to find a job. In this sense, they point out from this organization based in Paris, that the hiring rate fell by 5 points in the second quarter of 2020 and that, despite the lower restrictions, the unemployment rate was 37.6% in May (Eurostat).
All this, while Brussels has put duties to the Government, in exchange for receiving the 140,000 million of the new European rescue fund. TheThe European Commission demanded a profound labor reform from the PSOE and United We Coalition, to tackle the two great evils of our labor market: high unemployment among the younger population and the duality between fixed and temporary. All this, in line with the labor reform approved by Rajoy in 2012. The same as the current head of the Labor portfolio, Yolanda Díaz (United We Can, UP), insists on repealing.
In any case, the Executive has taken note of how they breathe in Brussels and approved last June 8 the ‘Youth Guarantee Plan Plus 2021-2027 ‘, endowed with 3,263 million euros in charge of the European Social Fund (ESF) and that is part of the Recovery, Transformation and Resilience Plan that plans to dedicate 4,950 million in initiatives against youth unemployment such as the ‘First experiences (330 million)’ programs and work-training, which combines theoretical and practical knowledge (600 million ). Only the ‘Youth Guarantee Plus 2021-2027’ contemplates up to 69 measures, to promote the labor insertion of those under 30 years of age. In the opinion of the IESE professor José Ramón Pin, “We must deepen the measures of the 2012 labor reform” and bets on avoiding the duality of the labor market “by reducing severance pay for permanent contracts and increasing that of temporary ones.” Pin attributes the current situation to the low productivity of workers “due to the organization of companies and the country” and that universities or institutes “do not prepare young people for the jobs they have to do.”
About measurements like ‘Youth Guarantee Plus 2021-2027’, EAE Business School professor José D. Canseco fears that “we are doing what we always do: subsidizing hiring and promoting temporary hiring. Due to all of the above, he believes that it is “better to invest a large part of this money in quality training” and asks not to trust everything to the self-employment of young people.
From Unemployment (Association of Employment Agencies and Temporary Employment Agencies) acknowledge that “labor reforms have been useful in adjusting the workforce to the needs of each moment.” In his opinion, now is the time to “reform entry into the labor market to facilitate access to it as much as possible” and urges to “seize the moment of economic recovery of companies.”
But has the rebound in employment reached younger workers? The latest data points in that direction: according to the Ministry of Labor, last month had registered in the offices of the SEPE (Public Employment Service) 262,411 under 25 years of age. Which is 36,926 fewer people than in June. One of the consequences of the end of the last state of alarm and the partial recovery of the activity. In the last five months, the number of unemployed in this age group has fallen by 103,992 people. It should be remembered that, in January of this year, the number of unemployed between 15 and 24 years was 357,123 people.
A recovery that has its pillar in another of the characteristics of employment in Spain: the high temporality. Specifically, of the 1,838,250 contracts signed during the month of July, only 165,000 were permanent. Only 9% of the hiring. In the accumulated of this year, 1,457,270 contracts have already been closed and, in the last twelve months, 302,128 more contracts have been signed (+ 19.67%). To the EAE Business School professor, José D Canseco, “Timeless policies are needed in terms of intention or approach, that a political party of another sign does not come and change everything.” Specifically, this expert pointed out the need for the public administration to meet at the highest level with businessmen, social agents and universities “for a change of approach” that includes modifications in the labor reform such as “accommodating part of the types of work” . In addition to modifications in the operation of the SEPE or the University-company relationship – «we need training that is very close to business reality» – and change the internship system, «since many are being used to amortize jobs: companies of 70 people with 45 interns cannot be sustained ».
For its part, from the employers’ association that brings together temporary work companies in Spain, they emphasize that “most of the young people who successfully enter the labor market access it through an employment contract, which ends up becoming stable”. For this reason, they ask not to confuse ‘temporality’ with ‘precariousness‘: “Precariousness is not having a contract, not being paid according to an agreement, doing unpaid overtime or lacking social protection for employment,” they point out.
Asked about the situation of many under 30s, in Unemployment, conclude that we are facing “a clear mismatch between the needs of the productive fabric and the initial training that young people have received.” As an example, he mentions dual training or internships, while making sure they are not used “as a way to get cheap labor power.”
More ‘ninis’ by the Covid
Illustrative of all the above, according to the analysis of the Circle of Entrepreneurs, is that the number of young people who neither study nor work grew again in the second quarter of 2020 after years of reduction. Specifically, year-on-year growth was over 4% in Spain compared to 3% in the OECD. Still in the fourth quarter of last year, the growth in the number of ‘ninis’ between 15 and 29 years old was 1% on average in the so-called ‘club of rich countries’ while the rise in Spain exceeded 1% .
Canseco (EAE Business School) explains that the so-called ‘ninis’ do not count for the purposes of the EPA (Active Population Survey) and clarifies that “they are not people who do not have money, but who do not study because they do not want and do not want to work because they do not like it or has given up. Specifically, he believes that up to two thirds of this group can be recovered through personalized training.
According to the most recent data from Ministry of Education, based on the Active Population Survey (EPA), At the end of last year, 17.3% of young Spaniards between 15 and 29 years old were in this situation. This represented a rebound of 2.4 points compared to 2019 and the break of the downward trend of recent years after the 2013 peak (22.5%).