By Don Quijones, Raging Bull-Shit.
Not for the first time in recent history, hordes of young Spaniards are packing their bags, upping sticks and heading for new lands. Like their grandparents before them, they have little choice but to seek work beyond Spanish borders.
There is no official figure for how many have left since the crisis began, but various estimates put the number at over 300,000. That figure has almost certainly skyrocketed since then, as many of the country’s most determined, most proactive and often most talented young adults seek out opportunities in other European countries, such as Germany and the U.K., or in fast-growing Latin American nations like Brazil or Mexico.
As César Castel, a Spanish head-hunter, complained to The New York Times, “this generation of young people who are leaving are our best qualified ever. It is a huge loss of investment for Spain. On average it costs us 60,000 euros to train each engineer and they are leaving.”
Ironically, one of the biggest beneficiaries of this mass exodus of skilled labour has been Germany, a country that some might claim is most to blame – apart from, of course, Spain itself – for the recent mass culling of jobs south of the Pyrenees. After all, it was the inherent imbalances in the economies of Europe coupled with the creation of a single currency designed and managed in the general interests of the region’s core economies, primarily Germany, that helped fuel the mad influx of capital and credit into Spain in the first place. The result was one of the biggest property booms in modern history, as prices more than tripled in just over a decade.
Boom to Bust
During the exuberant years of the construction boom many young Spaniards dropped out of school to take advantage of the generously paid jobs available in the building sector. Some even bought into the housing boom, buying up their first – and probably last – homes at scandalously high prices. Now many of them are not only without work, without a home and with an enormous debt load they’ll almost certainly never pay off, they are also competing for new jobs with millions of their generally better qualified brethren. The inevitable result is that when a new job magically does materialise, the qualifications demanded are far beyond their narrow skills set.
For the fact of the matter is that here in Spain, as in so many other countries, the delicate balance of power between labour and capital has shifted inexorably in the latter’s favour. As a consequence employers can demand – and offer – pretty much whatever they want from new workers.
While the country’s senior ministers can barely string even the most elementary of sentences together in English, at least without making a complete pr*ck of themselves, many restaurants in the big cities are advertising for candidates with a perfect command of at least two foreign languages.
What’s more, it’s not unusual for travelling sales reps to be required to provide not only their own car but also its own petrol; many supervisors and middle managers are often “asked” to work well in excess of the statutory 48-hour working week, with no prospect of over-time; and thousands of interns are putting in full-time shifts day after day in exchange for little more than their lunch money and bus fare home.
Indeed, it is these young interns that perhaps best represent the new face of Spain’s employment – or perhaps better put, unemployment – landscape. As the country’s staunchly conservative daily ABC recently reported, not only are many interns being paid far below the statutory minimum of 426 euros a month, many of the short-term apprenticeships, despite their supposed maximum duration of nine months, end up becoming indefinite arrangements.
In the complete absence of any kind of inspection regime, young workers are being shifted from one internship contract to another. Few of them will ever get hired full-time, and those that are, are invariably given a short-term contract that, once expired, is replaced by yet another.
Indeed, so rampant is the problem that it has even caught the attention of the European Commission, which recently blamed the Spanish authorities for their slack oversight of companies’ internship practices. It recommended a complete overhaul of a system which has led to the creation of a dual labour market for young workers in which many end up trapped on an endless carousel of internships and precarious jobs.
Youth Unemployment, A Western Epidemic
However, the Commission’s specious reasoning sadly ignores one vital, salient fact: namely that the problems currently afflicting Spain are merely a microcosm of what is happening at both the continental and global level.
While Eurocrats, government ministers and bought-and-paid-for economists have spent the last two months championing the continent’s miraculous economic recovery, EU-wide youth unemployment hit 24%. New records were set in Spain (56.5%), Greece (57.3%), Italy (40%) and France (26%).
As Danny Dorling warns in an excellent article in the New Statesman, mass unemployment is spreading like a slow-moving storm through the old continent:
It first hit some of the more peripheral areas of Western Europe in the late 1970s and then it waxed and waned, appearing to strengthen and spread during the recessions of the 1980s and early 1990s before engulfing almost all the periphery after the financial crash of 2008. From Greece to Italy, Spain and Portugal, up through parts of France and the UK, most of Ireland and Iceland and wandering into the poorer neighbourhoods of Scandinavian cities, then back down through the eastern periphery to Greece again – the storm now encircles central Europe.
In the U.S., meanwhile, the employment rate among young adults (18-24) is just barely above half, or 54% – the lowest point in 64 years. However, like its British counterpart across the pond, the American government has perfected the art of obscuring the grim reality of unemployment. Since 1994, all trace has been removed of unemployed workers who have not actively sought a job in the previous four weeks – hence the harmless 7%+ figure regularly trotted out by the Bureau of Labor Statistics. According to John Williams of Shadow Stats, the real unemployment figure in the U.S., calculated according to the method formerly employed by the government itself, is close to 23 percent.
In the UK, meanwhile, the government has taken even more extreme measures to hide the scale of youth unemployment. This it has done by allowing for the creation and proliferation of so-called zero-work contracts — contracts which, as their name implies, effectively allow employers to hire staff with no guarantee of work.
The system’s proponents argue that zero-hours contracts allow businesses to respond quickly and efficiently to constantly changing levels of demand. And while there is no doubt some truth in that, they also create an easily disposable workforce. As Len McCluskey, general secretary of Unite, told the BBC, zero-hours contracts effectively construct a “one-way street, whereby employers bear no risk, avoiding sickness and holiday pay and overtime.”
Rising Unemployment in the Emerging World
However, it’s not just in the once (and to a certain extent, still) privileged economies of the West that youth unemployment is growing into a huge, perhaps even insoluble, challenge. In Turkey, like many countries of the Middle East and North African region, youth unemployment is well above 30%.
As Asam Erdilek notes in a column for Today’s Zaman, the people most affected by unemployment in Turkey are the university-educated youth, making a mockery of “the widely held belief that university-educated men and women, equipped with costly skills will become more productive and therefore more employable.”
In Latin America, the problem is the polar opposite: young people without formal education or work – the so-called “ni-ni (neither-nor) generation.” According to a recent study by the ILO, they number some 21.7 million people across the continent. In Mexico, where the ni-nis account for close to 25% of the youth, the social effects are impossible to ignore: with little hope of finding meaningful work in the official economy, more and more young Mexicans are being recruited by the nation’s drug lords as cheap and disposable cannon fodder in the nation’s escalating gang wars.
Increased crime and delinquency is just one possible side-effect of widespread youth unemployment and disaffection. Another is the gradual disintegration of social and political cohesion. Lest we forget, it was the decision by Mohammed Bouaziz, a young Tunisian fruit seller persecuted by government inspectors, to set himself alight outside municipal buildings in March 2011 that lit the tinder box of popular resentment and ill-feeling toward governments across the Middle East and North Africa.
The warnings from history are clear: governments that allow youth unemployment to escalate, do so at their own peril. As the late business magnate Sir James Goldsmith warned, “The economy is there to serve the fundamental needs of society, which are prosperity, stability and contentment…. If you have a situation whereby the economy grows but you create poverty and unemployment and you destabilise society, you’re in trouble.”
Not that many of our governments seem to care. Yes, they might feign concern and even on occasion shed the odd crocodile tear for the plight of this fledgling century’s ill-fated youth, but, as was amply illustrated by the recently leaked content of the proposed Transpacific Partnership, their priorities ultimately lie elsewhere.
As such, it’s hardly a surprise that their proposed solutions to the growing unemployment epidemic not only fail to address any of its three root causes – automation, global offshoring and the accelerating unwinding of the largest global debt super cycle in history – they actually exacerbate the problem. But by shifting the balance of power even more in capital’s favour and further accelerating the race to the bottom in the global labor market, our rulers are not only sacrificing many of this planet’s youngest generations, they are also sealing their own fate.
Granted, in the short run the owners of capital will turn a quick buck – they almost always do. They will also further entrench their power, as the vast gulf in global incomes and wealth continues to widen. But in the long run they will canibalise the very consumers on whom their vast wealth and power depend.
In the end, the serpent will eat its own tail, just like Karl Marx warned in Das Kapital. As we are already beginning to see, companies’ insatiable pursuit of profits and productivity will inevitably lead them to need fewer and fewer workers, creating an “industrial reserve army” of the poor and unemployed: “Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery.” The question is: what happens when the dam containing all this pent-up collective misery finally breaks?” By Don Quijones.
Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.