Labour reforms help improve shocking youth employment figures in Spain by reversing ‘hire-and-fire- regime

Spain’s labour policy reforms have led to a significant increase in the number of young workers with permanent contracts, new stats show. 

Youth unemployment rates fell to 31% in the third quarter of 2022 – down from 37% in 2021, although this number would be negatively inflated by the impact of the Coronavirus pandemic.

Reforms implemented by the Socialist-led government in March were designed to reverse the previous easy hire-and-fire regime, which was criticised for eroding workers’ rights and prompting many young Spaniards to emigrate. 

As a result, the reforms also abolished most temporary jobs in order to provide job stability and reduce the unemployment rate, which had previously been around 25% of all jobs, leading to a high turnover that inflated the overall unemployment rate.

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Although Spanish youth unemployment figures have come down in 2022, they still lag far behind Spain’s European peers

Previously, youth unemployment in Spain had been steadily trending downwards – Covid pandemic excepted – from an incredible high of 55% in 2013, after the 2008 financial crash and 2012 Euro crisis.

However, the picture of youth employment in Spain is still grim, with peers Italy and Greece both boasting a better record (27% and 24% respectively), and only troubled Kosovo posting worse youth unemployment in all of Europe (38%).

The youth rate of unemployment still compares unfavourable to the overall unemployment rate of 12.6%, according to the National Statistics Office. 

Youth unemployment and under-employment rates have been among the highest in Europe since the global financial crisis.

One of the main provisions of the labour reforms was to make it easier to give permanent contracts to seasonal workers in sectors such as tourism and farming. 

These workers are entitled to benefits when not working but are not counted as unemployed, as they can be called up by their employer at any time. 

Because of this, the number of these so-called discontinuous contracts signed by young people under 24 has increased five-fold in the year to November, with this age group being one of the most employed under such contracts.

While the increase in permanent contracts is seen as a positive development, some experts have raised concerns about the quality of these jobs. 

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New reforms have helped reduce youth unemployment to a still lofty 31%

Many of the new permanent contracts are part-time or on flexible schedules, which can make it difficult for young workers to save money or make long-term plans. 

Additionally, the reforms have been criticised for lacking provisions to protect workers from exploitation and abuse, such as those related to overtime and working conditions.

Despite these concerns, the labour reforms have been welcomed by many young workers, who have welcomed the increased job stability and the opportunity to build a career. 

The country’s youth unemployment rate was previously among the highest in Europe following the financial crisis.

However, there are still concerns about the quality of these jobs and the need for further protections for workers.

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