Spain’s unemployment rate is down, but this is only because the jobless youth is leaving the country. José Ramirez explains how statistics fail to describe the reality of the labour market and what the European Union can do to stop the “brain drain”.
by José F. Ramírez, Spain
In late summer 2013, the Spanish media shared what seemed to be signs of hope for economic recovery: the unemployment rate had declined for the first time since 2009. Consequently, the data was used by the Spanish central government to justify the implementation of a controversial labor reform program, that back in 2012 intended to further decrease the unemployment rate in Spain.
However, nothing could be further from the truth, since the media have failed to properly interpret the data provided by the EPA, or Spanish Labor Force Survey, the statistical surveys that capture data about the labor market. EPA surveys provide information regarding two main variables: labor force and unemployment. Economists are well aware that the unemployment rate has declined. But it is important to point out that many people dropped out of the labor force at the same time because they have now begun studying, fallen ill, gone abroad or just given up seeking for a job. That means that the data isn’t a true picture of the situation on the ground.
The latest results from the EPA published on April 28 highlight that Spaniards haven been deprived of 184,600 jobs in the last three months. However, Mariano Rajoy, current Prime Minister expressed “his happiness” as unemployment has gone down to 25.93%.
“The Spanish government successfully sold the idea of a drop in unemployment, although the positive step would be to increase the workforce. Otherwise, they shouldn’t be speaking about improvement” says Desiderio Cansino, a Spanish economist based in Seville, a city in the south of the country. “It doesn’t make any good for the economy of a country.”
Drop in statistics is not due to improving labor market situation but decline in the measured population
One of the most overwhelming reasons for the drop in employment rate is emigration. In Andalusia, a 8 million people region in southern Spain, the population that emigrated peaked at 6.5% in only one year in 2012, meaning there was less workforce in the country. “It’s an estimation, it could be higher. When my grandparents emigrated to other countries in the 60s, they registered at the Spanish Embassies. That allowed to count emigrants. Nowadays, youth does not do that. They simply purchase a low-cost ticket and jump into adventure”, shares Desiderio. It should be noted that the European Union does not control the number of young people who move between member countries.
It’s not only the highly qualified youth that emigrate, but also many others, who would rather work as low qualified jobs abroad since they can gain foreign language skills, and apparently within better work conditions. One of the tragedies of this migratory flow is the “brain drain”, where highly skilled workers pack up and leave for elsewhere. Germany has become an increasingly recurrent destination, since it calls for a larger number of qualified professionals. Economists warn that the real effects of this should be studied, but it is true that many Spanish engineers and nurses have already found a place to perform the functions for which they have devoted years of university studies. Melisa, for instance, found a lab researcher position in Germany, in which she feels better respected. “In the last company I worked in Spain, I was forced to work twice the agreed hours with the same salary.”
Mission impossible for young people to find jobs in Spain
Why can’t young people find jobs in Spain? “The labor market lacks dynamic”, replies José Antonio Naveros, director of El Arrabal, an association dedicated to career guidance in the city of Málaga in the South of Spain. “There is a generation that is not able to enter into the labor market, especially young people. Job offers are scarce and most of them are uncertain.”
El Arrabal was established in 1992. Devoted to young people, the population that was the hardest hit after the Olympics in Barcelona and Seville Expo sector, the organization provides either tools to ease the search of a job or start their own business, as well as training for different occupations. Above all, they emphasize the promotion of what they call “generic skills” such as foreign language capabilities, computer and technology literacy or social and communication skills.
Andalusia is home to the largest jobless rate among under-30s in Europe according to Antonio Naveros, which remains around 66%. “Joblessness among young people is a detrimental obstacle as they are not able to start a proper career.” Among many other activities and efforts, Arrabal staff work on a platform called “Youth Guarantee” run by European Commission that will try to tackle youth unemployment and ensure that everyone under the age of 25 will not be out of work for more than four months. To put that into effect, all parts must activate a certain number of steps, tools and resources.
Currently, young people are frustrated and with few prospects. “Recent labor reforms have been a success for companies that had the chance to lower wages”, says Desiderio. “Things have changed dramatically. Young precarious workers could earn a thousand Euros few years ago, but it sounds a total privilege today. There is no alternative since the last economic reforms are leading young people to unemployment or precariousness”. Ana, 28, was working without a contract for 150 € a month while her boss used to earn a salary of 3,000 €. The reason was that they could not afford to hire workers on contracts.
“EU intervention has hijacked Spain’s monetary and economic sectors without creating jobs” says Desideros
All in all, some critic’s reviews blame not only the Spanish Government and investors, but also the intercessor role of the European Union. “The European Central Bank is a problem for Europe, it is just a transnational mega project, which main aim is to control inflation”, says Desidero. “Meanwhile, the U.S. Federal Reserve’s mission is also to create jobs. The ECB never took that decision. Our calamity in Spain focuses on the lack of work, so the entity needs a makeover. It has hijacked our monetary and economic sectors through contradictory policies to face up the problem of unemployment”, he goes on to add. Antonio Naveros doesn’t believe either that EU has performed according to the circumstances. “The only option is to create more jobs. What Europe has supported, is public sector budget cuts and Spain’s cutbacks in R & D, in an attempt of boosting economy. But if citizens have fewer financial resources, they will consume less and that deeply affects the business sector.” says Antonio Naveros.
Although the European Union can do much better, some aspects are still valuable assets. “Arrabal organization supports European exchanges quite a lot”, reviews Antonio Naveros. Last October, two volunteers from European Voluntary Service program arrived to their offices. The experience is not only rewarding both for the volunteers and the organization staff but for young job-seekers. European volunteers contribute with a different approach on cultural aspects that young people from Malaga used to ignore, as well as a grown-interest in learning new languages that can help them to get into the labor market. “I support an institution as European Union, but there is increasingly bigger economic gaps between Southern countries and Northern ones. Principles of solidarity and equality are not being implemented well. Exchange programs produce a bonding, a European community feeling, but in the end everything is mediated by the economy.
