Spanish political parties are letting down the young

Much more should be done to combat youth unemployment

Ifyou’re an 18 year old Madrilenian just leaving school and starting to look for work, you almost certainly don’t need telling it’s going to be tough, and you’re probably justified in feeling aggrieved.

Unemployment is a curse for any society, but when the young lose hope, the damage is deep and long-lasting. Spain’s young suffer from it more than most Europeans, with 42.2% of Spanish under 25’s out of work (and 37.9% of young Madrilenians). Many that do work are on low paid, temporary contracts.

Talk of a lost generation is not hyperbole: numerous studies show how a period of unemployment at the start of your career can drag your wages down throughout your working life and make it more likely that you’ll be jobless later on. It has scarring effects that are self-reinforcing, harming peoples’ self-esteem, lowering their aspirations and making them less marketable.

Many young Madrilenians have looked for work overseas. That’s not always a bad thing – they learn new skills and languages. But it would be much better if it was out of choice rather than necessity, and even better if Spain offered the opportunity to return home so that the country could benefit from those skills.

Being young and out of work can be tragic on an individual level but it’s also bad for society. Unemployed and low earners pay less tax, and need more spent on them in benefits. Lots of low earners mean less national insurance income to finance pensions. That’s particularly worrying in Spain where maximum state pensions can be €2560 a month, compared with about €720 in the UK.

With this ticking time-bomb you might expect policy-makers and political parties to be talking about little else. Take a look at the parties’ twitter feeds, however, and it’s hard to avoid the conclusion that they don’t care anything like enough. They should be obsessed about how to get the young working, and losing sleep over it. Yet as an example, the 394 policies contained in the 2016 election manifesto of the communist inspired Podemos party had no mention of youth unemployment and not one single measure aimed at reducing it (and quite a few that would make it even worse). Many politicians seem more interested in fatuous point-scoring on twitter.

The Madrid autonomous Government, together with the unions and employers’ associations, makes money available for training and provides subsidies. The Government, through labour minister Fatima Ibañez, makes the right noises. But much more should be done, and Prime Minister Rajoy looks like he sleeps far better than he should.

There’s no magic wand. Reducing the duality of the labour market would be a help – too many young workers are on temporary contracts which makes them cheap to fire and discourages investment in their training by employers. The self-employed in Spain have to pay some of the highest social security costs in Europe, a big disincentive to setting up on your own. The Government should put job creation before its voracity in tax collection, and take away red-tape.

Education is another area that needs to improve – companies complain that even with so many out of work they struggle to find workers with the right skills. Universities and companies should work closer together.

Many of today’s young could be less well-off than their parents – buying a house, for instance, may be beyond them. They will almost certainly not be able to count on today’s generous pensions, so will need to start saving earlier. They deserve a better deal. And politicians that tweet less and work more, which is, after all, what we pay them for.

By Roger Pike

WH Advisers – Helping International businesses understand Spain.


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