'Historic' investment in young adult employment: €5bn scheme announced

SPAIN'S government has announced a €5 billion investment in tackling unemployment in young adults, and legal changes that mean temporary job contracts can only be issued where a non-permanent position can be 'justified'.

Work minister Yolanda Díaz (Unidas Podemos) has called for companies to engage with the government's quest to get young people into the job market and building up a career.

“We cannot keep having young adults on salaries of €436 a month,” she argues. 

“It gives a very poor impression of our country, our national culture, and our companies.”

With the funding, a micro-credit programme and free legal and financial advice will help young people who wish to do so to start their own businesses, and Sra Díaz (fifth picture) calls it 'the greatest investment since the Transition to democracy' in 'tackling one of the key problems in this country'.

The umbrella project is called the Plan de Garantía Juvenil Plus ('Youth Guarantee Plus Plan'), but has many different sub-sections, and will be rolled out over the next six years, financed by the European Social Fund.

“We need our young adults' talent in the workplace”

Sra Díaz warns that unemployment in the under-25s, particularly, is 'a huge problem in our in-tray', although young adults out of work the scheme will target are likely to be aged up to 30 or 35.

Joblessness in the young in Spain varies drastically according to region, but the national figure is over 39% - the highest in the Eurozone.

“We cannot have a country without young people, without the talents of our young adults in our businesses,” says Yolanda Díaz.

The scheme has been worked out with significant input from companies and unions, as well as the regional governments, and its six key areas focus on career advice, training and education, job opportunities, equal opportunities, new business and becoming self-employed, and brand improvement. 

Sra Díaz says the ultimate aim is to offer 'personalised advice and guidance for every single young person' and provide them with the skills, training and qualifications they need to 'transform our productivity as a country'.

She calls for both the public and private sector to engage as much as possible and for a 'change in corporate culture', attracting back home those young adults who have been forced to emigrate to find meaningful work.

Highest-qualified generation

Unemployment, or poor-quality employment, varies largely by geographical location: Whilst it is less of an issue among younger adults in huge cities, jobs in coastal areas depend strongly on tourism and are more likely to be seasonal and menial, and in rural areas, very sparse or based in agriculture, where success or failure can literally be dictated by the weather.

Spain's governments, of varying political colours, have often pointed out that its younger adults are among the most qualified in history; typically they will be aged 22 or 23 when they finish university, and a college education or the equivalent vocational training is almost essential for being able to get any job at all, let alone a meaningful career.

And even lower-skilled positions generally require experience in applicants, as on-the-job training for those with potential but little or no history in the rôle is limited; getting this experience is, however, impossible without having a job first, resulting in a vicious circle many young adults find themselves unable to break.

Finance for young entrepreneurs who cannot get finance

The micro-credit scheme, together with free financial and legal advice, is aimed at those young people who have ideas for businesses that they want to put in place but cannot do so as they are unable to find a bank who will lend them the money for set-up costs.

Through the new government scheme, small business loans will be given subject to full career counselling and without requiring a guarantor or security – also, public funding will help them pay for premises if they need them.

Díaz says one of the key aims of the project is to 'combat the disillusionment' among young adults 'who have stopped looking for work because they have been unable to find any', a situation she calls 'worrying'.

Social services and local council youth departments will actively seek out those young adults who are neither working nor at college to 'make it easier for them to integrate into the national employment system, into education, or into career guidance'.

Temporary job contracts 'only where the causes justify them'

Furthermore, a 'substantial reform' of the temporary job contract system will be undertaken.

The idea of temporary positions is that they are designed to be finite to cover a specific need, such as maternity cover or peak season, and can be ideal for those workers who do not want to commit themselves to a permanent job because of future plans for study, travel, a longer-term career or starting a family, or who want to try out several career paths before settling on the right one – also, temporary contracts are typically given when a new employee starts with a firm, and if both parties are happy with their situation once the expiry date looms, the contract should then be replaced with an 'indefinite' one.

For many years, in the past, some companies would simply keep on renewing temporary job contracts, often for years at a time, but the law changed early this century to limit this practice – after a certain period of time working for the same firm, an employee would legally be considered permanent staff irrespective of what the contract said, and even if their service had not been continuous but with gaps in between contracts.

A number of unscrupulous employers have continued, however, to find loopholes, even including a string of consecutive new staff as each worker's contract ends.

Díaz's reform is aimed at stopping these employers in their tracks, rather than creating any negative effect for the majority of honest companies which use temporary contracts merely as a probation period.

It is likely that a temporary position will be limited to a set period – to prevent a person being a non-permanent employee on the same contract for years – with talks of their being capped at one year, although this has not been confirmed.

Additionally, temporary job contracts will be closely scrutinised and only permitted where 'the cause justifies' this. 

“There's too much abuse of various contract types,” Sra Díaz warns.

It is not yet clear how this will work out in parts of the country where the job market is in constant flux year-round – with large numbers of extra staff needed at peak season, but who would have little or nothing to do during their working hours off-peak.

This is one of the main reasons for each regional government becoming involved separately, so systems can be worked out according to geographical idiosyncrasies.