Unemployment among young people in Spain is decreasing
2022.12.19 02:16
Unemployment among young people in Spain is decreasing
Budrigannews.com – In a nation where youth unemployment and underemployment rates have been among the highest in Europe since the global financial crisis, a revision of Spain’s labor regulations has resulted in a 142% increase in young workers with permanent contracts.
The rise is evidence that the 9-month-old labor reform implemented by the Socialist-led government is overturning the easy hire-and-fire system that was in place a decade ago after the sovereign debt crisis. These rules were praised at the time for putting the country on a low-cost, competitive footing, but they were also criticized for undermining workers’ rights and driving many young Spaniards to leave the country.
According to the National Statistics Office, INE, youth unemployment rates that reached more than 55% in the years following the financial crisis decreased to 31% in the third quarter, compared to an overall unemployment rate of 12.6%.
In the countries of southern Europe, youth unemployment is a persistent issue. According to Eurostat, one in four young people in Italy were unemployed during the summer.
Greece is introducing subsidies for pension and health fund costs to reduce labor costs, as well as special training programs, with the goal of lowering its youth unemployment rate to 18% by 2030, which is comparable to Spain’s.
By the summer of 2021, seven out of every ten under-24s had a temporary contract, despite the fact that youth unemployment rates decreased in Spain as a result of the economic recovery that followed the financial crisis. As a result of the new labor regulations, that rate decreased by 13 percentage points in the third quarter of 2022. As a result, Spain performed slightly better than richer economies like the Netherlands or Italy in this regard.
The majority of temporary jobs were eliminated as part of the labor reform, which was negotiated with employers and unions and implemented in March. The goal was to provide job stability and lower the unemployment rate. In the past, in times of trouble, businesses utilized temporary contracts as a safety net.
GRAPHIC: “Finding an apartment is going to be easier now,” said Cristina Garcia, 24, who secured her first permanent contract as a receptionist at a multinational company in Madrid in September. Change in permanent contracts for people under 24.
The case of Garcia is unusual in Spain, where, according to the Spanish Youth Council, only 4% of 16- to 24-year-olds were able to leave their parents’ house in the first half of 2022. This is in contrast to the EU average of 17.7%.
However, young people assert that things are altering.
Sami Khalaf, 28, signed his first permanent contract in February after five years as a computer scientist at a Madrid technology company.
Khalaf, who recently left his parents’ house, stated, “I intend to save money, I see things differently.”
According to Raymond Torres, chief economist at the Madrid-based Funcas think tank, stable contracts have the potential to boost consumer confidence and drive spending. According to Torres, one of the pillars of Spain’s unexpected economic resilience during a period of global weakness has been the strength of the labor market.
Before the work change, the pace of impermanent agreements, which somewhat recently has been around 25% of all positions, brought about a high turnover of occupations, expanding the general joblessness rate.
Joaquin Perez-Rey, the reform’s deputy labor minister, told Reuters, “We have put an end to the idea that the introduction of young people into the workforce needs to be done through unstable contracts.”
A contentious provision was included in the labor reforms in March to make it simpler to grant permanent contracts to seasonal workers in industries like agriculture and tourism. Such specialists are qualified for benefits when not really working yet are not considered jobless as they can be called up whenever by their manager.
In the year to November, the number of these so-called discontinuous contracts signed by young people under the age of 24 increased by five times, making this age group one of the most frequently employed under such contracts.
Miguel Angel Malo, an economics professor at the University of Salamanca, questioned, “Whether this is better or worse than having several temporary contracts is debatable,” referring to the discontinuous contracts.
According to Adrian Todoli, a labor law professor at the University of Valencia, the Spanish furlough system, which was implemented to the majority of the labor market during the pandemic, has also increased permanent hiring.
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Todoli stated, “Employers now know that they can bank on these mechanisms in the event of a crisis, like the pandemic.”
According to Cristina Garcia, the money she makes from her 4.5-hour day job is sufficient for her to begin looking for an apartment with her partner.
She stated, “We’ve done the math and we can do it,” and “I’m looking to work weekends to earn a bit more.”
