The scourge of youth unemployment gets out of control with covid

Before the outbreak of the health crisis, young people had already become the most vulnerable group in Catalan society, taking this place from the over-75s, who were the hardest hit by the banking crisis. What the pandemic has done is punish them even more and make it clear that political solutions are needed to stop the current scourge of youth unemployment. Normally the unemployment rate of this group doubles that of the overall population in any country, but the latest data from the Labour Force Survey warns that in Catalonia it is almost three times higher. Last year closed with an unemployment rate among the population under 24 of 38.1% (11.9 percentage points more than in 2019), while for the total population it stood at 13.9%.

"It is an anomalous situation that will have long-term consequences both at the level of wages and unemployment and even pensions," warns the professor of applied economics at the University of Barcelona Raül Ramos, who exemplifies it. "Imagine a young recent law graduate who can't find a job in their field and ends up taking a job in a supermarket because their family situation requires them to have an income. If in two or three years' time they continue in the same job, it will be difficult for them to find a new position in the sector for which they were trained", he warns. This ends up causing what is known as overqualification, which is accentuated in times of crisis.

To reverse this situation, according to Ramos, we need active employment policies that work, that is, that detect job vacancies. To achieve this, however, it is necessary to increase investment in employment policies, as countries like Denmark have done. "Currently most of the money in this area goes to contract bonuses or unemployment benefits," he explains.

The other battle horse is long-term unemployment. In Catalonia, 18.5% of the unemployed at the end of 2020 had been looking for work for more than a year and another 17% had not worked in two years. "The older ones will hardly recover in the world of work but we have to put pressure on those who are around forty them to gain self-confidence and we have to accompany them with practical training," says Ramos.

Waiting for the labour reform

Although it is the responsibility of the central government, the labour reform will also shake the next Catalan government. The reform is among the Brussels's historical demands, which will use European funds to continue pushing in this direction. Among other aspects, the central executive will have to find a way to deal with job insecurity, which for years has been entrenched in the state labour market: in 2020, 24.6% of contracts were temporal. In Catalonia four out of every ten temporary contracts signed last year, out of a total of almost two million, had a duration of less than one month.

All this in the midst of a pandemic in which both the Spanish and Catalan governments will have to try to prevent the current temporary layoffs (ERTE), which initially end on May 31, becoming permanent layoffs and putting at risk the continuity of many small and medium enterprises, which are precisely the main economic engine of Catalonia. "It is key that now the focus is on companies and not so much on workers: companies must receive aid to adjust their workforce to the current situation without increasing the number of unemployed and taking into account that exports are recovering in some countries," says the lecturer.

According to the latest data from the Ministry of Inclusion, Social Security and Migration, Catalonia ended January with 171,139 employees in ERTE. To this we have to add that the health crisis has already left 132.100 unemployed in Catalonia, which is also the region where unemployment grew the most in absolute figures (one of every four new unemployed in Spain was Catalan) and the third in percentage (+32%).