Youth employment: an unsolved problem

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Shortages of jobs, alternating periods of employment and unemployment and lack of job security are the main features of the current employment situation for young people in Spain. For some of them this is a temporary situation, but others will find it hard to escape. However, the reform of labour market procedures that is currently being put before Parliament may go some way towards improving working conditions.

Employment situation of young people

The situation of young people in the Spanish labour market has been problematic since the mid-1970s. One of the consequences of the serious employment crisis that started then was the emergence of youth unemployment: in the context of a sharp decrease in paid employment, there was a tendency to avoid new contracts. This led to massive - and in many cases long-term - unemployment among young people. Youth unemployment remained very high until the mid-1980s, even though at this time the work participation rate amongst young people decreased considerably due to the extension of the period of compulsory education (the unemployment rate of young persons aged 16-24 ranged between 40% and 60%, depending on age and sex, in 1985).

In the mid-1980s, important changes began to appear. Between 1985 and 1991 there was a considerable growth in employment, mainly through the use of temporary contracts that particularly affect young people: youth unemployment decreased considerably (to between 24% and 40% for 16-24 year-olds) and temporary employment rose sharply (to between 65% and 80% for 16-24 year-olds). The problem of youth unemployment was thus transformed into a problem of insecure youth employment: young people are reaching an increasingly high level of education, but obtain less qualified jobs than they aspire to, and for a longer or shorter period alternate between temporary work and unemployment.

This situation worsened in the 1990s. During the 1991-4 recession there was a sharp decrease in paid employment, and since then very few jobs have been created. Meanwhile, youth unemployment is growing again, the rate of temporary unemployment remains very high and job rotation is increasing. An example of this is that 96% of all contracts signed in 1996 were temporary and 67% were at most for three months (according to the Labour Ministry). The shortage of jobs, alternation between employment and unemployment and job insecurity are thus the main features of the current situation of young people. For some this is a temporary situation, a longer or shorter period of transition to a relatively stable and skilled job; for others, it will be a situation from which it is hard to escape. The table below sets out statistics on unemployment and temporary employment from 1977 to 1996.

(*) The figures for temporary employment correspond to 1987, the first year for which they are available.

Source: EPA , 2nd quarter

Employment policies for young people

Since the 1984 reform of the labour market, young people have begun to occupy an important place in employment policy. The aim of this reform was to make the conditions for integration into the employment market more flexible by promoting temporary contracts. Among the different types of temporary contract that were then introduced, two were specifically aimed at young people: thejob-training contract and the work-experience contract. Both were aimed at training and integration and attracted incentives. Almost at the same time the Employment training and integration plan was set up, marking a great stimulus for occupational training (courses and workshop schools). One of the priority groups was that of young unemployed people.

Though these measures have been modified over the years, the promotion of temporary training/integration contracts and occupational training have been the two basic thrusts behind integrating youth employment policy to date. In its evolution, it is important to point out that the work-experience contract has been consolidated as a contract for integrating young people with vocational training qualifications or higher into the labour market, whereas the job-training contract (later called the apprenticeship contract), which was aimed at young people with only compulsory education or without qualifications, has declined in popularity over the years. A 1994 reform reduced the minimum wage and the social security contributions applicable to it, which among other things means that the level of social protection is much lower than for other types of contract. Furthermore, training is regulated in such loose terms that in practice there is no obligation on the company to carry it out.

However, these policies have had far less of an effect than expected. Young people without qualifications, or with only compulsory education, form a minority amongst students taking occupational training courses. Furthermore, the number of training/apprenticeship contracts has evolved according to the economic incentives prevailing, which shows that recourse to this type of contract has depended more on the opportunity it holds out for hiring cheap labour than on the aims of training and integrating unskilled young people. Perhaps the only exception is the work-experience contract, which despite its limited use (around 70,000 contracts in 1996, out of a total of 8.5 million, according to the Labour Ministry) has encouraged the integration of young people into relatively skilled jobs.

The position of unions and employers

The trade unions went into the 1984 reform under duress owing to the high level of unemployment. In this context, it was extremely difficult to combat the idea that "a temporary job is better than being on the dole". However, the sharp increase in temporary employment led to an open rejection of job insecurity, and from then on the divergence between the trade unions and the Government on labour matters increasingly widened: the launching of the Youth Employment Plan was one of the factors that sparked off the general strike of 14 December 1988, as a result of which the Plan was cancelled. The apprenticeship contract, which is very similar to this plan, was also one of the most controversial aspects of the 1994 reform, though in this case the trade unions were unable to stop it.

The problems of young people have had far less effect on employers. The employers' associations, which have for some time been demanding greater scope for temporary contracts, clearly supported the 1984 reform. With regard to young people they point out the new employment and training opportunities that were created by the reform. It is only recently that they have begun to see the high rate of temporary unemployment and job rotation as a problem, owing to its negative consequences on consumption, qualifications and productivity. This change of attitude has facilitated negotiations between employers and trade unions on a new reform of labour market procedures (ES9704207N), in which a new job-training contract for unskilled young people (replacing the apprenticeship contract) and a more favourable framework for contracting young people are some of the aspects that have been dealt with.

Commentary

The situation in companies is far more diverse and contradictory than would appear from the positions of the unions and employers. Young people are first and foremost cheap and flexible labour, with the added advantage of being better qualified than adults. Relations between trade unions and young people have not been easy at this level, due to the difficulties involved in representing a group that is so different from the rest of the workforce, both at work and in culture. Collective bargaining has acted as a buffer to a certain extent, in some cases regulating the training-integration contracts, and in other cases negotiating better conditions for temporary contracts. However, the problem has been transferring these regulations to companies, especially to small companies, in a context in which work is an increasingly scarce commodity. The pressure for jobs has thus had a great impact on companies, widening the gap between young people and adults, which is basically a gap between temporary and permanent staff: on occasions these differences have been even expressed formally, as was the case of those agreements in which a double pay scale was agreed in exchange for new employment (that is, newly recruited workers were employed on a lower pay scale than established workers).

Amendments to labour regulations and the reform that is currently being negotiated may go some way towards improving the employment situation of young people. However, the inequalities are not easy to eradicate, since everything indicates that pressure for jobs will continue to be great in companies. No major increase in the volume of jobs is foreseen, and the expansion of temporary employment seems to be a deep-rooted tendency that is linked to the expansion of semi-skilled employment and to the introduction of a model of labour management that tends to differentiate or fragment working conditions to reduce labour costs and achieve greater control over the workforce. (María Caprile, CIREM)