Updated Sunday,2July2023-14:57

  • Share on Facebook
  • Share on Twitter
  • Send by email


  • Young people Why Spain fails with youth unemployment and how to fix it

Spain today has 1.8 million more workers than in June 2018, when Pedro Sánchez arrived at Moncloa, but despite the strong job creation in these five years, the number of unemployed in the country has only fallen by 362,300, according to the EPA, and continues to exceed the barrier of 3 million. The unemployment rate has risen from 15.2% to 13.2%, but is still double the EU average.

There are several problems that continue to characterize the Spanish labor market and that will remain pending for the next legislature and who knows if for the next, since they are evils that seem congenital to employment in Spain, such as the high rate of youth unemployment, the bulky number of 'NEETs', the evolution of hours worked, the skyrocketing temporality in the public sector, the increase in sick leave or the problems of conciliation suffered mainly by women.

Even so, neither the pandemic, nor the war in Ukraine nor the inflationary wave that has hit the Spanish economy in recent years have prevented the labor market from resisting strongly. At the end of May, Social Security had 20.8 million average affiliates (1.8 million more than at the end of June 2018), of which 1.3 million had joined the private sector and 462,878 the public sector.

Companies have been the engine of job creation in the country, although not all the employment created since then is for salaried workers: the country today has 72,000 more self-employed than five years ago. Of all the new workers we have, 1.2 million are born in Spain and 580,123 are foreigners who have been incorporated into our labor market.

In this period, the Temporary Employment Regulation Files (ERTE) that were deployed during the pandemic have been fundamental to preserve employment (allowing companies to maintain their workforce without activity and without incurring a cost, to avoid resorting to layoffs). This served so that, once the activity in the country recovered, the workers returned to their posts. The State assumed the payment of benefits and the bonus of social contributions, but in return the level of employment was maintained.

Then, at the end of 2021, the approval of the labor reform – agreed with unions and employers – allowed to modify the structure of the labor market in Spain, since by restricting the use of temporary contracts and encouraging their replacement by discontinuous fixed ones (indefinite contracts that allow employees to 'put in' and 'take out' of the activity, without losing the employment relationship), the temporary employment rate in the private sector has fallen from 27.2% to 13.7%.

This positive phenomenon for the stability of employment does not hide, however, that there is still a high precariousness for those who do not have an ordinary permanent contract (since the discontinuous permanent workers are not guaranteed in all sectors a minimum of work per year), nor does it solve the lack of reliable official data to know how many permanent discontinuous workers are in a situation of inactivity each month, that is, without working and collecting or not the unemployment benefit, since they do not count as unemployed in the statistics of the State Public Employment Service (SEPE).

This is something that the academic community, the opposition, the companies and even the unions have repeatedly asked the Government: to make public the number of people who are not really working month by month, what they have called 'the effective unemployment', which adds to the official unemployed all those who in practice do not work. The Ministry of Labor has been promising for months that when it has the "purified" data it will publish them, but for the moment that moment has not arrived and that opacity gives free rein to criticism about the existence of unemployment that does not emerge in the data.

Precarious public employees and few hours of work

The high level of temporary employment in the public sector is another major problem in the labour market and has gone from 24.9% to 31.3% in the last five years. One in three people who work in the Administration chain temporary contracts - in some cases of only a few days - with what this entails for their personal stability. The Government has committed to Brussels to cut the temporality to 8%, but the truth is that far from implementing measures to achieve it, it continues to pull interim to strengthen some agencies such as the SEPE.

To the precariousness of those who are discontinuous permanent and spend long periods without working or public employees who chain contracts, is added that of wage earners who would like to work full-time but have to do so part-time due to their circumstances. For example, there are 1.3 million employees who do not work full-time because they cannot find an eight-hour job, because the boom in underemployment that occurred after the 2008 financial crisis has not yet been reversed.

In the last five years, the problems of conciliation have intensified for many families (especially for women), which is reflected in the increase of 81,200 people in the number of part-time workers because they have to take care of relatives, or in the 31,400 more who are with this type of contract because they have to meet obligations.

However, the greatest drama is not experienced by those who work fewer hours than they would like, but those who are forced to leave the labor market to face these tasks. They are the inactive, who neither have a job nor are looking for one, and who have increased considerably in the last five years, by 690,000 people.

In total, 636,000 people in Spain do not work or seek employment because they have to dedicate themselves to the care of children or the sick, 25% more than in the second quarter of 2018, since the improvements in the facilities to reconcile personal and family life have not been enough, such as the equalization of maternity and paternity leaves up to 16 weeks approved in this legislature.

The increase in the duration of paternity leave has contributed to an increase in the number of sick leaves (now there are 531,000 more each quarter), although the main reason is motivated by the aging of the population, according to data from mutual societies.

This increase in sick leave and leave, together with part-time work and the rise of discontinuous permanent contracts -which during some seasons do not work-, cause the recovery of employment in number of employed people to be very out of step with the recovery of employment in hours worked. The country has 5.7% more workers, but the average number of hours worked per week has fallen by 5.1%. This phenomenon, which is common to other EU countries, is also influenced by the sectoral recomposition of employment.

The situation of young people

Beyond these trends, the great losers of the Spanish labor market are young people, since 22% of those between 15 and 29 years old would like to work but cannot find a job, according to Eurostat, compared to 10.9% of the community average. Although youth unemployment in our country has fallen (in 2018 it was 26.5%), the improvement has been greater in other countries, with which we have gone from being the third worst in the EU to occupy the last place.

Part of the problem of unemployment is justified by training and the fact that Spain has a higher proportion of overqualified young people (with studies) than the EU average and also with a much greater number of people without training, but has a shortage of profiles with medium technical qualifications (that is, with a degree of Vocational Training). The Executive has committed itself in the Recovery Plan to promote vocational training and, especially, its dual modality (which promotes practices), but the country has much to do in this way.

Spain has also worsened its relative position with respect to other European countries in proportion of 'NEETs', young people who neither study nor work, and now stands in the eighth worst position in the EU (in 2018 it was tenth), despite the fact that this group has been reduced from 15.3% to 12.7%.

For young people, the increase in the Minimum Interprofessional Wage that has occurred in the last five years, of 46.7%, going from 735.9 euros in fourteen payments to 1,080 euros, has meant a strong improvement in their purchasing power, although it must be taken into account that, as different experts have warned, the increase in the SMI can be a barrier to entry into the labor market for people without experience.

According to the criteria of The Trust Project

Learn more

  • Employment
  • Unemployment