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Like hundreds of thousands of other young people, Jesus Pesquero Penas dropped out of school to work when the Spanish economy was booming. But since he was laid off from his construction job two years ago, he has been surviving on unemployment benefits.
Now Penas finds himself part of a lost generation in Spain, where unemployment among people between 16 and 24 years is 42.9 per cent, the highest in Europe, and more than double the overall rate.
“I went to work because the money was good, the lifestyle was good and I really wanted to get out of school,” said Penas, 25.
Spain is the extreme, but the experience of younger workers here reflects similar problems in the US, as well as other European countries still struggling to emerge from the recession.
In the last 12 months, the jobless rate in the US among workers aged 16-24 has risen to 19.1 per cent from 13.9 per cent. Economists expect the rate to remain high even as the overall jobless rate in the US — now 10 per cent — begins to shrink.
That is because the sectors that employ young people in the greatest numbers — fast food, construction, retail — are expected to take the longest to recover.
In the US, workers on the first rungs of the job market run the risk of lower earnings even after the recovery gets going, said Paul Osterman, professor at the Sloan School of Management at MIT who also teaches at the Institute de Empresa business school in Madrid.
Young Spanish workers, like their counterparts in the rest of Europe, face other obstacles like union rules, long-term contracts and legal protections that shelter older workers and discourage new hiring, Osterman said.
“There is a cohort of people who are condemned to a permanently stagnant career path in Spain,” he said. “It’s very worrisome.”
People like Penas, with few skills, bleak prospects and little desire to go back to university alongside younger students, are the most vulnerable.
Spain may be the worst example, but it is not alone, “Young people are the last in the queue when it comes to finding permanent jobs,” said Anne Sonnet, a senior economist with the Organization for Economic Cooperation and Development. “Even with university degrees, there are many barriers for young people.”
Adding to Spain’s woes, its government is unable to inject more stimulus and offer further support for job creation while the economy languishes as one of the weakest in Europe. The outlook on Spanish sovereign debt was recently downgraded, and the government is moving to raise taxes and cut spending.
To be sure, Spain has traditionally suffered from relatively high unemployment, and at 19.3 per cent, its overall rate today is double the 9.8 per cent average for the EU.
At this level, Spain stands out from other troubled European countries. In Greece, for example, the youth unemployment rate is 25 per cent, while Ireland’s is 28.4 per cent and Italy’s 26.9 per cent.
In part, Spain is paying the price for its efforts to make it easier to put young people to work. In recent years, a disproportionate share of Spanish youth were employed on temporary contracts. So they were the easiest to lay off when the economy sank, said Alfonso Prieto, deputy director general of employment studies at the Ministry of Labor and Social Affairs.
Experts say that Spain needs to invest more heavily in vocational education and retraining, and require the jobless to improve their skills.
