Unskilled youth wages now down to 20 year low in Spain

A RECENT STUDY conducted by the Bank of Spain shows that the young people with a lower academic level are earning and spending less than they did over two decades ago.

The main factor for this according to the study is Spain’s economic crash in 2008.

The high rate of unemployment, changes in employment law and the reduction of working hours goes some way to explaining the concerning results.

Pablo Hernández de Cos, Governor for the Bank of Spain, has warned that “nothing will improve unless specific measures are taken to support the young who are taking the brunt of the changes in the labour market.”

Figures show that unskilled workers born after 1987 are now earning 20 per cent less than they did in the late 1990’s, whilst even skilled workers and people over the age of 40 are on average earning less than they did before the crisis.

Spain’s unemployment figures amongst youth workers now sits at 70 per cent, way above the European average of 52.6 per cent.

The reasons behind the alarming figures are a mixture of factors. Firstly the lack of proper relevant skills taught during education, secondly inconsistencies in employment law that makes it easier for employers to fire young workers rather than raising wages.

Thirdly is the shortening of temporary contracts meaning turnover is far greater.

Hernández de Cos strongly suggests a complete reform in government policies regarding youth employment, giving young workers more stability and more rights and giving employers more incentives to allow younger members of the workforce to stay with companies rather than become “disposable”.