1. No category

How to fight youth
unemployment?
Author: Luis Cortès
Movimiento por la paz (SPAIN)
September 2012
y:
How to fight youth unemployment?
1. INTRODUCTION
Spanish economic performance is currently facing a significantly different scenario to the boom years
beginning in the mid-1990s. From 1996 real GDP in Spain grew more than twice as fast as the EU average,
employment grew by more than 50% and the general unemployment rate fell to about 9 %1.
The most recent unemployment data published by the INE2, the Spanish National Statistics Institute, in July
2012, shows that 37,600 more people were unemployed in the 2nd quarter of 2012. In one year the total
number of unemployed people has increased by 782,900 and the total number of unemployed people are
currently 5,693,100. The unemployment rate stands at 24.63 %. Eurostat ranks Spain as the country with
the worst rate of unemployment, even compared with Greece, Portugal and Ireland and their record high
rates of unemployment.
According to the INE, the term unemployed describes a person aged 16 years and over who, is jobless,
available for work, and actively looking for a job. People who might have already found a job and are
waiting to start are also considered to be unemployed, provided that they meet the first two conditions.
According to European Commission Regulation 1897/2000, the following are considered to be active search
methods in the four weeks prior to the interview: 1) Being in contact with a public employment office for
the purpose of finding work, whatever part they play in the initiative (the renewal of registration for purely
administrative reasons does not constitute active planning). 2) Being in contact with a private office
(temporary employment agency, specialized hiring agency, etc.) with the aim of finding work. 3) Having sent
an application directly to employers. 4) Having searched through contacts, trade unions, etc. 5) Having
advertised oneself or responded to newspaper advertisements. 6) Having studied job vacancies. 7) Having
taken part in a test, public exam or interview in the framework of a contracting procedure. 8) Having looked
for land, premises or material. 9) Having taken steps to obtain permits, licenses or financial resources.
The effects of the global crisis on the labour market in Spain have been four times higher than in the
majority of other EU countries3; young people and low-skilled workers on temporary contracts have been
1
EUROSTAT. Unemployment statistics 2012. European Commission.
2
INE – Instituto Nacional de Estadística
3
The Employment Crisis in Spain. International Labour Organization. For an explanation of the characteristics of the Spanish
economic boom during the period 1999-2007 , see A. Estrada, J.F. Jimeno, and J.L. Malo de Molina, “The performance of the
Spanish economy in EMU: The first ten years” in J.F. Jimeno, ed., Spain and the euro. The first ten years, Banco de España, 2010
(http://www.bde.es/webbde/Secciones/Publicaciones/OtrasPublicaciones/Fich/Spain_and_the_euro.pdf)
1
How to fight youth unemployment?
disproportionately affected because the growth model relies excessively on construction and housing.
A real estate driven-demand on the Spanish economy has had a huge impact on household finances and the
public and private sectors. Today one of the biggest economic challenges is growth without public expenses.
This new economic policy is far from the previous crisis in the 90’s when European Structural Funds
stimulated the labour market by using active employment policies and the economy grew through public
expenditure.
According to Eurostat, the youth unemployment rate in Spain has increased by 28 percentage points (from
18 to 45.8 per cent) since 2007. It is one of the highest youth unemployment rates among European
countries as Table 1 shows, reaching more than 73.27% for people aged 16-19, almost 48.93% for those
aged 20-24 and 31.06% for those aged25-29.
Table 1: Unemployment rate by age. INE
80
70
60
50
Total
40
16 - 19 aged
30
20 - 24 aged
20
25 - 29 aged
10
2005TI
2005TII
2005TIII
2005TIV
2006TI
2006TII
2006TIII
2006TIV
2007TI
2007TII
2007TIII
2007TIV
2008TI
2008TII
2008TIII
2008TIV
2009TI
2009TII
2009TIII
2009TIV
2010TI
2010TII
2010TIII
2010TIV
2011TI
2011TII
2011TIII
2011TIV
2012TI
2012TII
0
Young people aged 16 to 24 have been particularly affected due to temporary contracts, as reported in
Table 2. In summary, 1 in every 2 young people in Spain is unemployed. Temporary and low-skilled young
workers are affected the most, given that the dismissal of temporary workers is easier and cheaper for
companies.
How to fight youth unemployment?
Table 2: Temporary and Permanent contracts by age. INE
100%
90%
80%
70%
60%
50%
40%
30%
Temporal contract
20%
10%
0%
Permanent contract
16 - 19 aged
20 - 24 aged
25 - 29 aged
However, the economic crisis can only partly explain youth unemployment, since this problem has been a
persistent phenomenon in Spain for decades. And at the levels now being registered, measures to fight it
i
can no longer be delayed. “The long-term
term unemployment rate has increased most significantly in Denmark,
Ireland, Spain, the United Kingdom and the United States since 2007” ILO4.
Structural problems in the labour market remain: lack of competitiveness, flexibility, resilience and
adaptability. The main issue to be discussed is how to fit the current Spanish economic model (and
unemployed people like youngsters) into a knowledge-based
knowledge based economy (competitive in a global market).
To cope with unemployment, Prime Minister Mariano Rajoy´s Government in February 2012 approved a
new labour market reform. A new permanent contract is aimed at young workers. "The goal is to make it
easier to hire new workers in our country, especially the young and long-term
long
unemployed",
oyed", Deputy Prime
Minister Soraya Saenz de Santamaria told the news conference. However, trade unions called a general
strike on 29 March in protest at this new reform, because it makes it easier for companies to fire workers,
especially for those under permanent contracts.
“El Plan de Empleo de España 2012” (The Employment Plan for Spain 2012), approved in July by the Spanish
Government with about 1.3 million euros from the state budget, considered it a priority to fight youth
4
World of work report 2012: Better jobs for a better economy/International Labour Office, International Institute for Labour
Studies. – Geneva: ILO, 2012
How to fight youth unemployment?
unemployment by improving the employability of young people, vocational training and entrepreneurial
issues.
If the current crisis persists, Spain risks losing a generation and experiencing social unrest brought about by
movements such as “15 M Spanish Revolution”, which involved mainly young people ,and “29 March
general strike” against labour reform encouraged by the Government.
2. SPANISH YOUTH LABOUR MARKET
According to Eurostat Labour Statistics, youth unemployment rates in Spain have been rising since mid2007, reaching more than 50% in 2012. Just before the crisis the youth unemployment rate had been stable
at around 20% for 6 years, having dropped from 45% in 1994.
For main social agents such as trade unions, working conditions and long-term unemployment have a huge
effect on the Spanish welfare system, as Silvia Sazatornil, responsible for Youth at the UGT trade union,
stated:
“What we have seen during these past two or three years is that young people are returning
to a period of increased insecurity, namely situations that had previously been overcome.
Therefore, at the moment there has been a setback. Policies and ideas of employment quality
and decent jobs have been abandoned and young people just want a job. Therefore, they
have set aside the idea of having equal rights simply because they prefer worse labour
conditions rather than remaining unemployed.”
Precariousness is not only associated with having temporary contracts; now, young people are lucky to get
one of these. Therefore, precariousness is not only evident for temporary workers. Precariousness also
leads to excessive rotation in companies, disorders, psychosocial maladies, anxiety, long working hours,
unpaid extra hours, a higher rate of accidents in the workplace, lack of adequate training for the post, etc.
Young people “ought to accept” this situation because there are many unemployed young people willing to
accept the conditions of precarious work.
4
How to fight youth unemployment?
The greatest risk of precariousness for the young is that they will not be able to leave home at a reasonable
age. A few years ago we were in a situation where young people frequently left home at the age of 29,
which is already a fairly high age in comparison with other European countries. Under the current situation
this has risen to 31 years. The average age for leaving home in Spain is higher than ever and, indeed, the
mass media are reporting stories of many young people who are returning to their
their parents, because they
cannot afford the costs of living.
The current situation is worse than in the 1960s
when the wages of young people were much better
than today’s in comparative terms, as well as having
better access to housing. Today that means a
mortgage of 50 or 60 per cent of one’s salary and
the age for moving out is about 29 years, six years
older than for most European young people.
The 15 M5 movement caused social unrest, and is also referred to as indignant movement. Even though
protesters
ers form a heterogeneous and ambiguous group, many of them are young people. The 15 M
Movement began in March 2011 as a social movement far removed from political parties under the ‘Arab
Spring’ framework. It rejects unemployment,
unemployment welfare cuts, the two-party system consisting of the Spanish
Socialist Worker’s Party (PSOE) and the Spanish People's Party (PP), bankers and political corruption and
firmly supports what it calls basic rights: housing, employment, culture, health and education. For a better
understanding of the 15 M social movement, Stéphen Hessel wrote in 2010 “Time for Outrage!” (“Indignez
vous!”6 in the French version), which could
c
be defined as an ‘anti-globalist’
globalist’ manifesto for international
social rights.
An ILO Report in 20127 wrote about 15 M: “In Spain the ‘indignados’ movement and its occupation of the
‘Puerta del Sol’ square in Madrid mobilized youth across the country in
in protest against the handling of the
economic crisis by the political establishment and the ensuing catastrophic rise in youth unemployment. A
central demand of the movement was for more participatory forms of democracy, reflecting the younger
generation’ss sense of alienation and economic and social exclusion”.
5
http://movimiento15m.org/sobre-movimiento
movimiento-15m-org/
6
http://indignez-vous-indignacion.blogspot.com.es/p/english.html
indignacion.blogspot.com.es/p/english.html
7
ILO Report V: The youth employment crisis: Time for action. International Labour Conference, 101st Session, 2012. ILC.101/V
How to fight youth unemployment?
E. Crespo, Professor of Social Psychology at UCM and also Research Group Co-Director at EGECO
(Employment, Gender and Social Cohesion Regimes), has an interesting opinion of the 15M social
movement:
“Regarding the 15 M "Spanish Revolution" movement I think that there is such a necessity for
change that its importance has been magnified (...) I think that the 15 M is a movement that
is very interesting as an expression of what is happening. I have my doubts about the capacity
for change that it might bring about. I certainly see that 15M has now lost its momentum,
with a reduced capacity for mobilization. ”
According to statistics published by the RTVE, the Spanish public broadcasting company, between 6.5 and 8
million Spaniards participated in these peaceful protests. The mass media reports that these protests are
related to the Spanish financial crisis global crisis and many participants could be defined as NEET8 or a “lost
generation”, as The Guardian considers Spanish graduates who have moved abroad.
2.1. Spanish Social Security system for the unemployed
The Spanish Social Security system supports people who are willing to work but, for whatever reason,
cannot find work or have lost their jobs, or even if their hours have been reduced.In order to qualify for
unemployment benefit the following rules apply9:
- The applicant must be registered with Social Security.
- The applicant must be registered with the Employment Office and be available to actively search for a job.
- The applicant must accept an adequate job offered by the Employment Office.
- The applicant must present their application for unemployment benefit.
Furthermore, the applicant must have made Social Security payments (usually done by the employer) for a
minimum of 12 months within the last six years before becoming legally unemployed, providing they are
under retirement age, unless they have a specific right to it.
The duration of this benefit depends on how long one has been contributing to the system. If you have
8
NEET: acronym for “not in education, employment or training”.
9
www.sepe.es/contenido/prestaciones/ag00.html
6
How to fight youth unemployment?
been working legally and making Social Security payments for between 360 days and 539 days (i.e. one to
one and a half years), the benefit will last for 120 days.
The amount one is entitled to receive depends on the gross salary received by the worker during the period
of employment. The person will receive 70% of the salary for the first 180 days, and from then on, 50%,
according to recent measures passed by the Government in July.
Average unemployment benefit in Spain is about 750 euros per month, up to a maximum of about 1200
euros, whereas the legal minimum wage is about €641 per month. That means that unemployment benefit
is higher than the minimum wage, which may discourage people from looking for a job while they are
receiving unemployment benefit. However, only 15% of young unemployed people receive unemployment
benefits in Spain because they do not qualify under the rules described above, according to data gathered
by trade unions. Young people leaving school or who have been unemployed for a long period of time are
not covered by the Spanish Social Security system. Many of them are supported by their families or work on
the black market.
Due to the present economic climate, for those unfortunate enough to have lost their jobs, a return to the
workplace is far from certain and unemployment benefit does not usually last for a sufficient period of time.
Once unemployment benefit has run out, in some cases a subsidy10 can be applied for. In such cases, the
subsidy is about 420 euros per month, which is lower than the minimum wage. Note that it depends on the
personal circumstances of the person in question, e.g. if they have family responsibilities.
Regarding the amount of unemployment benefit, we conclude that it does not affect youth unemployment
rates. However, it is possible that an increase in the legal minimum wage could lead to an increase in youth
unemployment rates, especially for less-skilled workers.
2.2. Industrial Relations profile of the Spanish labour market11
Industrial relations in Spain are managed by trade unions and employer organisations. It should be
highlighted that Spain has traditionally had one of the lowest rates of trade union membership among the
EU15. The most important national trade unions in terms of number of members are the Trade Union
10
www.seg-social.es/prdi00/groups/public/documents/.../49446.pdf
11
www.eurofound.europa.eu
7
How to fight youth unemployment?
Confederation of Workers’ Commissions (Comisiones Obreras, CCOO) and the General Workers’
Confederation (Unión General de Trabajadores, UGT), in that order. These two organisations represent over
70% of all trade union membership in Spain and are recognised as the most representative organisations.
This means that any of their trade union organisations and federations are authorised to negotiate at their
respective levels, regardless of their number of members and representatives. The most representative
employer organisations are the Spanish Confederation of Employers’ Organisations (Confederación
Española de Organizaciones Empresariales, CEOE) and the Spanish Confederation of Small and MediumSized Enterprises (Confederación Española de la Pequeña y Mediana Empresa, CEPYME). It is not possible to
comment on trends in the membership density of employer organisations due to lack of information.
According to the National Advisory Board on Collective Agreement, we can highlight the following aspects
about industrial relations in Spain:
The national minimum wage (salario mínimo interprofesional, SMI) is a minimum guarantee of pay for all
types of workers and is a reference for determining minimum monthly contributions and some social
benefits, such as unemployment benefit. The government sets the SMI each year after consulting the most
representative social partners. After a long period of continual loss of purchasing power, in 2004 the
socialist government decided to revalue the SMI. From 2008, it amounts to about €600 a month.
The total labour cost – which includes pay and contributions – is about €2,271.88 per worker per month. Of
this amount, 73.8% represents pay costs (€1,676.70) and the remaining 26.2% represents other costs
(€595.18).
The average number of working hours per week is about 38. Working time tends to be longer in multicompany agreements, whereas company agreements have shown the greatest reduction in agreed working
time in the last 10 years. This has led to a progressive widening of the gap between agreed working time at
company level and at higher bargaining levels.
The number of agreements that include clauses on flexible distribution of working time has increased in the
last few years. In 2007, about 20% of agreements featured clauses of this type, affecting 49.2% of the
workers covered.
Other aspects of flexible working time, such as working days longer than nine hours and accumulating
weekly time off, have less importance in collective agreements: long working days concern 18.9% of the
8
How to fight youth unemployment?
workers covered and accumulating time off concerns 17.3% of the workers.
Social partners have given greater attention to the issue of lifelong learning and training as a vital element
for achieving a more sustainable and competitive economic model. About 40% of agreements registered in
2007 contained clauses on continuing vocational training, which affected 51% of the workers covered by
collective bargaining. These rates of coverage have remained stable in recent years.
Training is increasingly dealt with at the more decentralised levels: about 45% of company agreements
contain clauses on this subject, affecting 70% of the workers covered by this level of bargaining. However,
the official figures do not reflect the real extent of training practices in companies as there is no obligation
to negotiate training initiatives with workers’ representatives. Collective agreements mainly consider
company training plans.
Industrial conflict has shown a progressive decline over the last few decades. The number of disputes and
their importance in terms of participation and working days lost has decreased considerably. This reduction
in the number of strikes was due to the duration and intensity of the economic growth cycle, bipartite social
dialogue establishing common guidelines for pay bargaining to ensure industrial peace, and the
consolidation of bodies and procedures for resolving labour disputes out of court.
Strikes have been used to apply pressure during the bargaining processes, to protest against the refusal to
sign or revise an agreement or – less often – as a result of differences in interpretation of the prevailing
agreement.
In the last few years, the national social dialogue process has been intense. Social dialogue has been
extended to many economic, labour and social issues with a common strategic objective: to promote a
sustainable economic model based on improving company competitiveness and increasing productivity to
reach a higher level of development and employment equality.
In Spain, workers have two channels of representation at company level: the trade unions and the joint
bodies that represent all workers of the company. The joint bodies – the workers’ committees and the
workers’ delegates – are also highly unionised in practice because most of the candidates are presented by
the trade union sections of the company.
Workers’ committees are elected in all companies or workplaces with more than 50 workers. The number of
9
How to fight youth unemployment?
representatives is determined according to the electoral audience of each candidacy and the mandate is for
four years. The competencies of the worker representatives are regulated by workers´ statutes and include
the right to receive information from the employer and to ensure fulfilment of the agreed working
conditions.
Collective disputes that arise between employers and workers may be resolved through an agreement
between the parties, or through mediation or arbitration by the labour inspectorate or another competent
body, which must be accepted as a solution by both parties to the dispute.
2.3 New labour market reform
New labor market reform (by Royal Decree-Law 3/2012, dated 10th February, on the urgent measures for
labour market reform) is the main measure taken by the Government in order to cope with youth
unemployment, trying to promote among other reforms a new permanent contract for young workers.
According to Vicente Cuñat, Lecturer at LSE12:
“Job market duality in Spain refers to the two very different types of employment contracts
that coexist. About 60% of employees have permanent contracts, which mean that they have
legal restrictions to being fired, high severance pay and, overall, a protected job. The
remaining 40% work under fixed-term, often short-lived, temporary contracts, with no
severance pay. Firms value the flexibility that temporary contracts give, but, as a result, they
have little incentive to invest in on-the-job training or transform their most valuable
temporary employees into permanent ones. This generates a great deal of inefficiency, as
well as inter-generational and inter-class inequality. Most temporary workers are young and
low-skilled.
And he continues:
“The reforms will reduce the employment protection of permanent contracts. This is likely to
be a positive move, bringing Spanish permanent contracts closer to those in most EU
countries. However, the reform does not change the nature of temporary contracts. The gap
between both types of contracts will obviously be reduced but not by enough to end the
duality problems”.
12
http://blogs.lse.ac.uk/europpblog/2012/04/23/the-reform-of-the-spanish-labour-market-is-politically-costly-and-will-only-bringminor-economic-changes/
10
How to fight youth unemployment?
Trade unions called for a general strike on March 29th against new labour market reform. Trade unions
consider it a useless measure against such a high rate of unemployment. The only effect will be to make it
easier and cheaper to fire workers.
Labour market reform establishes the following main aspects according to Eurojuris España13 an
international network of law firms in Spain:

Reform of some aspects relating to labour-related mediation and professional development training.

Temporary Employment Companies have turned out to be a powerful force for the labour market in
times of economic crisis, creating jobs and contributing towards employee inclusion and placement.
The new Law allows them to operate as employment placement agencies, in line with other EU
countries. In addition, the Law seeks to foster workers’ continuous learning and development of their
full potential, granting paid leave of 20 hours per year to those workers who have worked for the
company for at least one year.

Encouraging permanent employment contracts and other forms of employment: special focus on young
people and SMEs.
These measures seek to help those who are in the most severe financial need due to the economic crisis.
Firstly, it has been noted that the number of part-time contracts is much higher in countries within our
region. Therefore, the aim is to boost this type of contract through, for instance, the possibility to work
extra hours and include them in the contribution base for common contingencies. Secondly, also with the
aim of promoting new work-related development channels, the system traditionally known as “working
from home” was altered, which has implemented a balanced regulation of “telecommuting” rights and
obligations.
The Law also created a new permanent employment contract exclusively for companies with less than 50
employees, which entitles the company to apply certain tax incentives and a bonus system if they hire
young people between 16 and 30 or people in long-term unemployment who have been on the jobseekers
register for at least twelve out of the eighteen months prior to being hired.
Incentives to foster the company’s internal flexibility: alternative measure to job loss. The Law has created
mechanisms that do not involve dismissal in order to maintain human capital by adapting working
13
http://www.eurojuris.net/eng/publication-detail.asp?PublicationId=334
11
How to fight youth unemployment?
conditions to the specific circumstances the company is undergoing.
In summary, the 2010 and 2012 labour market reforms modified the legislation of both individual and
collective dismissals. For individual dismissals, notice periods in cases of dismissals for objective causes have
been reduced from 30 to 15 days. In cases of unfair individual dismissals, the employee is no longer entitled
to the salary that accrues during the tribunal proceedings if the dismissal is contested. Moreover, the
employee is now only entitled to 33 days’ salary per year of service (compared to 45 previously). Finally,
consultations between the employer and workers’ representatives in cases of collective dismissal have been
reduced to a maximum of 30 days in companies with more than 50 employees and 15 days in smaller
companies.
As Vicente Cuñat, Lecturer at LSE, concluded regarding Spanish labour reform:
“This is a reform that heads in the right direction on some aspects but ignores, or only
partially deals with, many needed changes. It is also a reform that unnecessarily risks being
perceived as one-sided; echoing the demands of some corporate representatives and not
making the necessary changes that are potentially beneficial to everyone. Its high political
cost decreases the chance of further reforms in the near future, sadly, giving a certain sense
of missed opportunity”.
3. CHARACTERISTICS OF THE TARGET GROUP
In order to briefly explain the current situation of high rates of youth unemployment, the following factors
of exclusion from the labour market should be taken into account:
1. Temporary work as the most important exclusion factor for young workers14
It has a huge impact on unemployment in recession, especially in economic activities like construction and
real estate. 94% of job destruction is related to temporary workers. As E. González, International Relations
Coordinator, Institutional Relations & Judicial Assistance at the Spanish National Public Employment Service
(SEPE), stressed:
14
Amuedo-Dorantes, C.; Serrano-Padial, R. (2005). Fixed-term employment and its poverty implications: Evidence from Spain”, In
Focus, Vol. 23, No. 3, pp. 42-51.
Dolado, J.J.; Garcia-Serrano, C.; Jimeno, J.F. 2002. “Drawing lessons from the boom of temporary jobs in Spain”, in Economic Journal,
Vol. 112, No. 721, pp.270-295. Available at: http://ideas.repec.org/a/ecj/econjl/v112y2002i721pf270-f295.html [14 Apr. 2012]
12
How to fight youth unemployment?
“Between 2004 and 2007 the construction sector in Spain expanded significantly, and many
people left training and the education system to find in the labour market a job that did not
require any professional qualifications. The number of young people who dropped out of the
education system was massive; from there, once the crisis hit the sector, it too found it easy to
reject these young people. We now have two main problems: the first is the difficulty of
access to the labour market for these young people (internships with companies are rare) and
the second is that employers seek professional experience, a very valued factor. Wages at the
moment are not attractive.”
Temporary jobs are one explanation for the impact of the crisis on youth unemployment. About 60% of
young workers were hired under temporary contract conditions, a percentage that rises to 82% for people
aged 16 to 19.
Specialized technical analysis reveals that companies´ labour factor adjustments have been made by ending
temporary contracts. According to the ILO15:
“Spain, along with Poland, continues to have the highest proportion of temporary
employment in Europe (20 per cent), despite significant losses of temporary employment
during the crisis (…) In contrast, in Spain, job quality was improved through the destruction of
temporary jobs. Spain also presents the highest rate of transition from temporary jobs to
unemployment in 2009.”
There is also a cultural factor that explains the bias in payroll adjustment towards workers without family
burdens like young workers. Flexibility but not security characterize Spain’s labour market, and also explain
the vulnerability of young workers, due to their high rate of temporary employment: 82% of those aged 16
– 19, 60% of those aged 20 - 24 and 40% of those aged 25 – 29 are on temporary contracts.
2. Many young people left school in the booming years
In fact, young men experienced an important increase in their activity rate, particularly those aged 16 to 24.
This behaviour is closely associated with low-skilled demand from intensive workforce sectors such as
15
World of work report 2012: Better jobs for a better economy / International Labour Office, International Institute for Labour
Studies. – Geneva: ILO, 2012
13
How to fight youth unemployment?
construction. As a matter of fact, this factor contributed to drop out from school.
This phenomenon should be taken into account in order to understand the structural feature related to
youth employment that is characterized by a high level of temporary working. In Spain, more than 28% of
young people aged 18 to 24 have at most lower secondary education and are not in further education or
training (early school leaving), which is more than twice the EU-27 average. 1 in every 4 young people is
defined as NEET.
A. Jaspe, responsible for the coordination and evaluation of occupational training at the Spanish Public
Employment Service (SEPE), argues that NEETs should be the focal point in order to establish an strategy to
fight against youth unemployment:
“We would like to stress that in this new European strategy, special attention is given to
young people, so SEPE participated in the introduction of indicators beyond rates of
employment and unemployment in this group. In this sense the concept of NEET (Not in
Employment, Education or Training) is created as a significant indicator because it measures
something more, it measures the vital activity of the young in relation to the labour market.
In the case of Spain this indicator is providing significant results that attend to social and
educational needs, as well as demographic and those of the family of young people.”
J. Bonet, responsible for occupational training at the Spanish Public Employment Service (SEPE), added on
this subject:
“What we must do as a Public Service for Spanish Employment is firstly to be aware of this
reality and to adopt policies. These policies should distinguish between groups, those
identified as qualified and those who do not have any kind of qualification.”
The incidence of early school leaving has remained high and stable during the past decade, while it has
tended to decline in most other EU-27 countries.
3. The educational level of those who have lost their jobs during this period represents another
important factor of the exclusion of young people from the labour market.
As shown in table 3 below, unemployment is concentrated in two main groups of young people. Young
14
How to fight youth unemployment?
people with primary education have experienced an unemployment rate of 60% and those with secondary
education an unemployment rate of 45% when aged 25 to 29.
For well-qualified youngsters the current situation is also dramatic; many of them are looking for jobs
abroad, because of the lack of opportunities for them. For those aged between 25 and 29, unemployment
rates reached 22.85%.
Last year, NEETs made up a significant percentage of unemployed young people, and vocational training
could again be the solution for these people.
Table 3: Unemployment rates by level of education attained, sex and age group 2012
Total
Illiterates
First stage
Second
Primary
of
stage of
Higher
education
secondary
secondary
education
education
education
Doctorate
Both sexes
Total
24.44
53.10
36.22
31.50
24.09
14.37
3.80
16 to 19
71.45
0.00
80.39
72.46
62.17
43.85
..
20 to 24
48.06
21.04
62.71
51.75
46.07
36.87
..
25 to 29
31.17
63.67
48.64
40.38
27.38
22.85
10.18
Total
24.09
56.11
36.52
30.58
22.54
12.88
3.02
16 to 19
71.22
0.00
79.37
70.56
64.68
36.83
..
20 to 24
50.34
100.00
61.40
50.98
49.69
37.57
..
25 to 29
32.90
59.85
47.58
40.83
27.89
23.22
0.00
Total
24.86
49.90
35.78
32.89
25.81
15.78
5.02
16 to 19
71.73
0.00
82.12
75.04
60.35
53.30
..
20 to 24
45.57
0.00
65.43
52.95
42.79
36.48
..
25 to 29
29.28
81.62
50.68
39.66
26.89
22.56
20.87
Males
Females
15
How to fight youth unemployment?
4. Gender discrimination
Gender pay differences are affected by the occupational segregation of women, who tend to be
concentrated in the lowest-paid sectors and jobs. The increase in the participation rate of Spanish women in
the labour market has been accompanied by an increase in low-quality employment, with a high level of
temporary employment, part-time work and staff turnover. As a result of all these factors, the annual
income of women is 30% lower than that of men. Even though the education level of young women is often
higher than that of young men, their unemployment rate is higher, their wages lower and they are more
likely to end up in precarious jobs16.
5. Need for vocational training
Director of the Spanish youth employment observatory and lecturer at UCM, E. Sanchez, argues that
vocational training schools are somewhat stigmatized as “second-class”:
“In Spain, vocational training has not been established in the terms required by the labour
market, as in the rest of Europe. The burden of the General Education Act, a law put into force
in the 1970s and one of the last laws of the Franco Regime, is still being felt. The General
Education Act set out the idea that vocational training should be a ‘second-class’ education.
This legislation made education compulsory until the age of 14, and at that age, children who
failed were sent to vocational training as a stigma of failure at school. Although that
structure has not been maintained, it has not yet been overcome.”
6. Deficit of Research and Development and innovation
Most stakeholders interviewed highlighted the lack of R&D and innovation as a main structural problem
regarding the youth unemployment phenomenon in Spain. As José Luis López, in charge of the
Socioeconomic Department at the CJE Spanish Council for Youth, stated:
“I think we have an opportunity as we have the best-qualified young people for 35 years.
Spain has invested a lot in their education. We have a highly-qualified young generation but
they have to go abroad because they cannot get a job in Spain. We understand that one of
the solutions is precisely investment in R&D and innovation. We must take advantage of this
talent.”
16
Moreno, G y Cebrian, I. (2008): La situación de las mujeres en el mercado de trabajo español. Desajustes y retos. Economía
industrial, nº 367. Ministerio de Industria, Turismo y Comercio.
16
How to fight youth unemployment?
The European Commission recommends that public deficit control measures should not affect Research and
Development and innovation. However, the Spanish Government approved on 30th March a State Budget
that would cause considerable long-term damage to the already weakened Spanish research system.
This would imply the maintenance of an obsolete economic model that is not competitive as mentioned
above and is especially vulnerable to economic and political contingencies.
In the last few years, investment in Research and Development has been cut significantly: public research
bodies have suffered a 25% reduction in resources coming from the State Budget 2012 plus 30%
accumulated from previous years.
The situation has been considerably aggravated by financial difficulties at universities, which contribute to
more than 60% of the research in the country and whose budgets have suffered severe restrictions in the
last few years, seriously affecting their research potential in terms of their material and human resources,
especially those of young researchers.
E. Sanchez, Director of the youth employment observatory and lecturer at UCM, is also worried about
Spanish R&D policy:
“we need to invest knowledge-transfer from academia and universities in the productive
sector. In my opinion this explanation is central to understanding the high youth
unemployment rates in Spain.”
7. Low salaries and worse working conditions
Salaries and working conditions are based on employment experience and time working for the same
company. Productivity does not contribute to determining salaries. As a result, young workers have worse
working conditions. David Silva, President of the CEAJE, the Association for Young Entrepreneurs, says of
the mismatch between salary and productivity/qualifications in our labour market:
“Until 2007 Spain had been a country where low-skilled workers had pretty high salaries. For
example, a bricklayer earned €4000 per month, half in A and half in B –black market–, just for
putting bricks together. Whereas a surgeon who had trained for 10 years and had begun to
see a return on his effort much later earned € 2800 per month after 20 years of work. That
17
How to fight youth unemployment?
paradigm leads to the situation that many young people drop out of school and aren't
educated in the culture of effort. ”
According to the ILO17, an examination of the nature of jobs created between 2007 and 2010 shows that
the majority of new jobs are remunerated at a rate below average wages. This is particularly the case in
Spain, and especially affects young people.
8. Training contracts
On the subject of scholarships and training which is one of the ‘modalities for recruitment’ -in quotesbecause nobody has the right to benefit either from unemployment or from social security, these are also
paid below the minimum wage and replace a job.
Trade unions are calling for a major overhaul of training contracts to avoid discrimination against young
workers. Paola Guisande, responsible for Youth at the Madrid branch of the CCOO Trade Union, said:
“We believe that training contracts should be regulated much more. It cannot be right that a
young worker aged 35 with a postgraduate qualification can have a job where they do the
photocopying and bring people coffee.”
If we look at the training data, young people have better training than other experienced workers. For
instance, languages and computer literacy are relevant skills for well-qualified young people.
In summary, regarding the above exclusion factors of young people from the labour market we can draw the
following interesting 5 conclusions:
1. Construction and building activities between 2004 and 2007 grew significantly in Spain, so young
people left school to find a temporary well-paid job in the labour market, without any professional
qualifications. As a matter of fact, drop out of school was massive; from there, once the crisis hit
the sector, it was easy to reject these young people. So early school leaving has been very high and
returning to training will be very difficult for many of them.
2. Young people with good qualifications have few opportunities in the labour market, and there is
17
World of Work Report 2012: Better jobs for a better economy.
18
How to fight youth unemployment?
also a mismatch between the education system and what the labour market requires.
3. University graduates who are well-qualified are suffering from the scholarship deficit to innovation
and promotion of Research and Development policies.
4. Internships with companies have been regulated, since they occupy jobs in many companies.
5. The Spanish model lacks good working conditions, since it is based on seniority in the company, not
linked to productivity, which leads to a lack of solidarity towards young people.
4. GOOD PRACTICE
Active employment policies
Active employment policies have been a useful tool to fight against youth unemployment in Spain,
especially for those low-skilled workers who acquire job training and, for many of them, their first
experience of the world of work. However, active employment policies have been cut significantly in the
State Budget for 2012, which risks long-term youth unemployment and social costs. To illustrate good
practice on this important issue, six polices can be highlighted18:
1. Promotion of local initiatives. In 1986, and particularly in 1994, the government established a
programme for promoting local employment initiatives which gives advice and subsidies for setting
up viable projects to small and medium-sized enterprises. In other words, it is an approach from the
bottom, from the local level, rather than a centralised approach from the top. Nevertheless, these
initiatives are not of sufficient scope and importance to create jobs on a large scale.
2. Improving information systems and labour market observatories. It consists in improving the
information systems between demand and supply in the local area by promoting employment
"observatories" at a regional level. The aim of the network, connected through electronic mail, is to:
exchange information on labour demand and supply; exchange labour information for the planning
of local policies; study demands for qualifications and professional profiles for companies; and
18
http://www.eurofound.europa.eu/eiro/1997/07/feature/es9707214f.htm
19
How to fight youth unemployment?
monitor and assess employment policies.
Another novelty in labour mediation is the establishment of personalised employment programmes
for certain groups of people who find it difficult to obtain work. These programmes form part of the
Integrated Employment Service Plan (SIPES) of the Ministry of Labour, whose aim is to provide
careers guidance. The SIPES plan is run by the town halls, amongst other institutions, and is linked
with the "trade houses" (Casas de Oficios) and "workshop-schools" (Escuelas-Taller), whose
purpose is to share the training of young people - in craft trades and professions - with work on
useful public tasks such as restoring historical buildings, repairing parks and gardens and so on.
3. Commercial development and export promotion. A fourth line of action taken by regional
governments is the promotion of trade and export.
4. Fiscal policies and investment incentives. The third line of action is through fiscal policies. In recent
years, certain regional governments have been carrying out initiatives to stimulate investment in
their respective territories. This has led some companies to move their headquarters to regions.
5. Vocational training and occupational training. Vocational training was reorganised in the period
1993-6 to increase the quality of the content of training, and to bring it closer to the demands of
companies, the needs of the labour market and the establishment of new qualifications. Two types
of qualification will be recognised: those resulting from official vocational training and those
resulting from occupational training. Occupational training also plays an important role as a
mechanism for rapid adjustment between demand and supply of training and professional
retraining, especially at the local level, because it can be adapted more quickly than official
vocational training. At a local level the workshop schools and trade houses, linked to the town halls,
also make a contribution to training. The activity of these local institutions is aimed particularly at
young people who have failed at school, those who have not finished school and those who find it
difficult to enter the employment market.
6. Regional employment policies. As an example of the integral and general nature of attempts to
reorient regional employment policy.
European mobility strategy
The European mobility strategy to assist well-qualified young workers in getting a job abroad in European
countries is a good practice to highlight. To improve mobility it is necessary to enhance language skills of
20
How to fight youth unemployment?
young people from school. Erasmus programmes represent a good practice for well-skilled youngsters.
However, the mobility of young people through EURES should be increased, which requires improving
information about vacancies and a better recognition of educational achievements from one country to
another. Spain is the European country where more students go abroad under this programme.
Research and Development policies
Another example of good practice carried out jointly by the Spanish Public Employment Service, SEPE, and
the Directorate-General for Research and Innovation of the Ministry of Economy and Competitiveness is the
recruitment of technologists within SMEs, through a system of loans to small businesses for Research and
Development. It is an opportunity for companies and therefore is working well.
5. CONCLUSIONS
As was recently written in a report on Spanish youth unemployment by the SOLIDAR Social Affairs
Committee by MPDL19 there is no single solution to the challenges regarding the high youth unemployment
rates, especially during the current economic recession.
This issue requires in any case, as noted by the International Organization of Labour (ILO), integrated and
coherent interventions combining macro and microeconomic approaches in various spheres: the education
system, the labour market and social policies.
The challenges in youth employment and the labour market are, as pointed out by the International Labour
Organization (ILO), to help young workers to have a good start, promoting their occupational trajectories to
reach decent jobs. If the impact of the economic crisis on young people has been a significant increase in
precariousness, it is necessary by all means to promote leaving the parental home and decent living and
working conditions.
Active employment policies can play an important role. These policies have a positive impact, although they
are limited to increased occupation rates. Their scope depends on policies contributing to boosting the
recovery of economic activity in the different productive sectors. However, the State Budget for 2012
reduces widely the amount dedicated to these employment policies.
19
Fernandez Nuevo, P (2010): Youth unemployment in Spain. http://cms.horus.be/files/99931/Newsletter/MPDL%20%20Youth%20unemployment.pdf
21
How to fight youth unemployment?
Also there is a need to promote changes to shift from the ‘current productive model’ towards a knowledge
economy to enhance human capital in terms of job quality and innovation. Social dialogue, social contracts
or tripartite negotiation on youth unemployment is a huge issue to tackle urgently.
Age cohorts should be considered as a focal point, considering that not all young people have the same
qualifications or perspective for the future, i.e. young people who are NEET.
Obviously we must analyse segments of the youth population and try to implement those policies based on
each group.
Some aspects of the labour market have already been reformed: for example, training and apprenticeship
contracts are encouraged for those young people who have no qualifications. However, there are other
groups for whom it is possible that active policies of employment are not appropriate; rather, it is necessary
to look for other solutions. As for well-qualified young people, it is necessary to implement other measures
within the business sector, to offer training through active employment policies.
Recently, European Commission President Mr. Barroso said that there would be a specific budget fund to
help countries whose young people are at risk of exclusion, a measure which, if carried out properly, could
be significant.
22
How to fight youth unemployment?
6. RECOMMENDATIONS
Regarding the youth unemployment situation by age group, we can consider the following actions:
Age group
Main problem
Action proposal
16 to 19 years
School leaving
Return to school policies
20 to 25 years
Lack of training and
Active employment policies
mismatch for job post
and dual system
Lack of work experience
Scholarships and internships
26 to 30 years
Reduce early school leaving
The rate of drop out of school is one of the highest among EU countries, and it is especially relevant for two
reasons: firstly, because it determines a higher degree of precariousness in working conditions. Secondly, it
has a high social and economic cost in terms of poverty and social exclusion. The recommendations made
by the Council, supported by the trade unions, constitute a good basis for the design of a strategy aimed at:

A better understanding of this phenomenon.

Strengthening careers guidance in compulsory education (ESO).

The need to ensure an adequate supply of training alternatives.

Increased flexibility in the post-primary educational offer, prompting an interconnected educational
system with pathways to facilitate the passage from vocational training to general education and
vice versa, and increasing movement between the educational system and the labour market, in
order to encourage the return to training.

Facilitating a combination of work and training through a more intensive school timetable and
distance learning.

The implementation of the system of recognition, assessment and accreditation of qualifications
obtained through professional experience or non-formal ways of learning.
23
How to fight youth unemployment?
Improve Vocational Training policies through a ‘dual education system’
Spain requires vocational training policies to cope with changes and needs and also measures to enhance
young people’s participation in vocational training:

A more attractive vocational training offer through institutional action to diversify, supply and open
up pathways and settings to return young people to the education system.

Encourage cooperation among organisations and institutions linked to the local productive system.

Promote competition and quality of teachers and trainers.

Improve information, advice and guidance related to decisions taken in relation to education and
career development for life.
The dual education system in Germany has become, as many interviews pointed out, a model in Europe as
it combines an apprenticeship with a company and vocational education at a vocational school. Both
companies and vocational schools are co-responsible for young people’s education. Trainees enrolled in the
dual education system spend one or two days a week at school and three or four days in a company. Such a
model represents a guarantee for employers that a youngster has acquired the necessary skills and
knowledge related to the job on leaving school.
Encourage an entrepreneurial culture in the education system
Promote an entrepreneurial culture in the educational system. This would mean that at the end of
compulsory education students could develop an ‘open-minded’ attitude towards self-employment, not
only as an alternative to unemployment, but also as a positive choice. In short, improve ‘soft skills and
competences’ like autonomy and personal initiative, communication, social and citizen competence,
solidarity, critical thinking, etc.
Internships as a good policy, but under regulation
According to the OECD20, initial experience in the labour market has a profound influence on later working
life. Getting off to a good start facilitates youth integration into the world of work and lays the foundation
for a good career, while it can be difficult to catch up after initial failure.
Compared with other European countries, Spanish students have limited contact with the labour market
before they finish school. Few of them combine work and study, and there are relatively few internship
opportunities. Evidence from other countries, like Germany, highlights the benefits of combining study with
20
OECD: Off to a good start? Jobs for Youth. 2010
24
How to fight youth unemployment?
part-time work, in terms of post-education labour market outcomes. A guarantee of training is one of the
best practices we can highlight, but it should be controlled in order to protect young people from
exploitation because it has been abused in many companies.
In Spain there are very positive experiences of training scholarships because they provide an introduction to
companies and facilitate the transition from training to the labour market, but once the training finishes,
these scholarships should no longer be necessary.
Research and Development policies
To include Research and Development and innovation among the “priority sectors”, allowing hiring in public
research bodies, universities and technological centers, will avoid a “brain drain” that would take decades to
reverse. This recommendation is linked to well-qualified youngsters and the need to change the economic
model to a knowledge economy.
Access to lifelong learning
Today, Curriculum Vitaes are assessed in a different way; they are no longer only about qualifications, but
also value "soft skills“ such as adaptability. It is possible that the latter could be improved by an education in
values. There is a certain ambiguity about what the job market requires. In Germany they have begun to try
to find out what companies require in terms of 'soft skills' in addition to professional qualifications. The
need for guidance and access to lifelong learning is recognised by companies and specialists in labour
market institutions, collaborating with schools from an early age.
Non-formal education recognition
Professional experience when applying for a job should be recognised with an official certificate in order to
facilitate the return to the labour market.
25
How to fight youth unemployment?
7. LIST OF STAKEHOLDERS
Prof. Dr. Eduardo CRESPO, Professor in the Department of Social Psychology, Faculty of Sociology and
Political Studies (University Complutense of Madrid, UCM). Eduardo Crespo is also Co-Director of the
Research Group EGECO (Employment, Gender and Social Cohesion Regimes). EGECO is an interdisciplinary
research group focused on these matters; EGECO maintains a direct relationship with European researchers
and Research Centres in the field.
Dr. Esteban SANCHEZ, Senior Lecturer in the Faculty of Social Work (Complutense University of Madrid,
UCM). Esteban Sanchez is also Director of the Spanish Observatory for Youth Employment and associated to
the Department of Sociology V (Social Theories) in the Faculty of Political Science and Sociology at
Complutense University of Madrid.
Mrs. Elvira GONZALEZ, International Relations Coordinator, Institutional Relations & Judicial Assistance.
General Sub-department of the Spanish Public Employment Service (Spanish initials, SEPE). SEPE offers
services to workers, whether active or unemployed, and to companies. Applying for and being granted
unemployment benefits, obtaining benefit-related certificates and reporting hiring and sending in company
certificates are among the services offered, as well as vocational training for employment and up-to-date
information on the job market and statistics on employment and training.
Mr. Juan BONET, Responsible for occupational training at the Spanish Public Employment Service (SEPE).
Mrs. Almudena JASPE, Responsible for the coordination and evaluation of occupational training at the
Spanish Public Employment Service (SEPE).
Mrs. Silvia SAZATORNIL, Responsible for the Youth Department at the UGT – Confederation Level (Unión
General de Trabajadores). One of the most representative trade unions in Spain, the UGT is an institution of
productive workers, organized along lines of trades and liberal professions, which respects freedom of
thought, leading toward the transformation of society, in order to establish it on the basis of social justice,
equality and solidarity.
26
How to fight youth unemployment?
Mrs. Paula GUISANDE, Responsible for the Youth Department at CCOO - Madrid (Comisiones Obreras).
CCOO's Trade Union Confederation is the central office of a prestigious, democratic trade union which
confederates the national and regional union’s state federations and confederations. It defends the
professional, economic, political and social interests of both male and female workers in all spheres of
labour. CC.OO. is affiliated to the European Trade Union Confederation (ETUC) and the International
Confederation of Free Trade Unions. It is also part of the Trade Union Consultative Committee to the OECD.
Its industry-wide federations are members of the European and international federations.
Mr. David SILVA, President of the CEAJE, the Spanish Confederation of Associations of Young Entrepreneurs,
which has more than 20,000 members. The CEAJE is a not-for-profit organisation, whose aim is the
promotion of a business vocation among young people, by offering them support and advice on the
economic and business world.
Mr. Jose Luis LOPEZ, in charge of the Socioeconomic Department at the CJE, the Spanish Youth Council. The
Spanish Youth Council is an organization devoted to cooperation among young people. It has two principal
goals: to be present wherever problems having to do with young people are debated upon and to create
solutions to the problems affecting young people based on youthful ways of thinking.
Mrs. Ana PICAZO, Officer programme in the “Leganes Occupational Centre” at the Madrid Regional Council
for employment. This educational centre provides the most advanced training in mechanical and
aeronautical techniques. Ana Picazo is also a teacher at the vocational training school “IES Sagrado
Corazon”.
27