Youth in Spain enjoy job gains after revamp

MADRID: A revamp of Spain’s labour rules has led to a 142% rise in young workers with permanent contracts in a country where rates of youth unemployment and under-employment have been among the highest in Europe since the global financial crisis.

The increase is evidence that the Socialist-led government’s 9-monthold labour reform is reversing the easy hire-and-fire regime put in place after the sovereign debt crisis a decade ago — rules hailed at the time as putting the country on a low-cost, competitive footing, but also criticised for eroding workers’ rights and prompting many young Spaniards to emigrate.

Youth unemployment rates that reached more than 55% in the years after the financial crisis fell to 31% in the third quarter — against an overall unemployment rate of 12.6%, according to the National Statistics Office, INE.

Youth unemployment is a chronic problem in southern European countries. One in four young people were unemployed in Italy during the summer, according to Eurostat.

Greece, whose rates of youth unemployment are similar to Spain’s, wants to reduce its youth unemployment rate to 18% by 2030 and is introducing subsidies for pension and health fund costs to reduce labour costs, as well as special training programmes.

While youth unemployment rates improved in Spain with the economic upturn after the financial crash, by the summer of 2021 seven out of every 10 under-24s had a temporary contract. That rate fell by 13 percentage points in the third quarter of 2022 following the new labour regulations, making Spain slightly better off in this regard than richer economies such as the Netherlands or Italy.

The labour reform, negotiated with employers and unions and introduced in March, abolished most temporary jobs in an attempt to provide job stability and reduce the unemployment rate. Previously, employers used temporary contracts as a safety net in times of crisis.