In recent years, Spain has managed to reduce the youth unemployment rate and significantly improve the quality of their jobs, which allows for a very moderate optimism the fact that our percentage of unemployed people under 25 remains the highest in the European Union. But this improvement remains insufficient (or comes too late). to compensate for the declining role of youth employment in the labour market: After falling from 11.7% in 2002 to 4.2% in 2014, it has only climbed to 5.9% so far in 2024.
This development responds to various causes, the decline in the birth rate which has accelerated the aging of the population, although it is also influenced by the fact that young people have reduced the rate of early school leaving, which delays their entry into the labor market. In any case, its consequences directly affect the pillars of the “emergency culture” which has traditionally governed the approach to labour policies and has forced us to rethink our actions not only in terms of pension sustainability, but also immigration.
The decline in the relative weight of youth employment is not only explained by the increase in the number of people employed in other age groups. In absolute figures, employees under 24 have suffered a drastic reduction. In 2022, while they represented 11.7% of the total, they totaled 1.92 million soldiers, according to data from the Active Population Survey (EPA). Although the maximum of the series is in the second quarter of 2005, with 2.15 million (even if the rate was 11%, because then the increase of the rest of the employees in the rest of the age groups was greater).
But in 2024, with a record 21.7 million people employed, 28.2% more than in 2002 and 11.6% more than in 2005, there were only 1.2 million people under 25. That was 34.3% and 39.4% less, respectively, than their historical peaks as a percentage of employment and as an absolute number of workers. Of course, this is well above the 2014 minimum of 707,100 young people. with an employment participation of 4.2%.
If we take as a reference the moment when employment (not only of young people) reached a minimum in the historical series, we see that employment recovered by 4.7 million (from 16.9 to 21.7 million). But that of young people is struggling provided 590,000 soldiers, 12%, at the start of the school year.
One of the keys to this trend is the decline in the available labor force in this age group, that is, the total number of active people under 25 who have a job or are actively looking for a job. In the second quarter of 2024, there were 1.77 million, or 7.7% of the total. This figure is 30% lower than the 2.5 million reached before the financial crisis.while the percentage was 13%. This is despite the positive contribution of immigration in recent years, both by foreigners who now arrive to work in Spain like the children of previous generations who were born and raised here and now they are joining the job market.
This suggests that the demographic impact would be compounded by high youth unemployment, if it were not so disproportionate, with 470,000 unemployed. This translates into an unemployment rate that more than doubles the general rate at 26.7%. Although it is the lowest since 2008, it is still more than 6 percentage points above the historical minimum of 20% reached in 2005. Even if, here again, far from the 50% rates it reached in the years of the Great Recession.
Exodus from brick to hospitality
At that time, one of the arguments put forward to explain this explosion of data was that young people were working in low-skilled sectors that generated much more volatile jobs. The usual example is that of construction, which led many miners to abandon their studies attracted by the wages then paid in bricks. This, it was said, would change with a change in the production model and an improvement in the education of those under 25.
But while young people’s education has improved, their job expectations have not improved. On the contrary, they have traded some low value-added sectors for others. For example, EPA data show that there has been a shift in youth employment to the hospitality industry, which concentrates 20.71% of workers in this age group, i.e. 10 points more than in 2008.
The weight gained by the hotel industry corresponds to what construction has lost, although the evolution of the labour market has also reduced the weight of commerce and manufacturing in youth employment. It is still striking that bars and restaurants are among the companies that most denounce the lack of labour, which shows that, although they “accumulate” more young workers, their reduction has been notable.
Young people have increased their presence in jobs requiring high qualifications, but in a very small proportion. In the case of the technology sector, it has increased from 2.8% to 4.48%. Below are leisure, cultural and sporting activities, which total 5.9%.
The distribution of employed people under 25 years of age contrasts with the average for the rest of the age groups, which sets employment in the hotel industry at only 8.71%, four less than the manufacturing industry which reaches 12%, so that commercial activities represent 14%. %. iThen come health and social services, which are gaining weight in an increasingly ageing country.
In any case, the important role of “low value-added” service activities is a characteristic of the common labour market for all age groups. And this raises a key question.
¿It is worth it for young people to improve their education if the labour market is not ready to absorb their talents.? In this situation, many people under 25 who have completed their studies find themselves facing a triple scenario: unemployment due to not finding suitable employment, emigrating or accepting jobs below their capacities.
This brings us to another fact: Spain is the country with the highest rate of overqualification in the European Union. A dark scene thator worsens the prospects of “generational change” which has guided labor policy in Spain for decades.
