The Pain in Spain

One of the notable features of the current recession in Spain is how much the young the youth have disproportionately suffered from the economic problems that the country is undergoing.  Of course the young will always be more vulnerable because they have less experience and training but the way that the Spanish system is set up especially makes it difficult for young people.  The irony is that a lot of the cause for why young people are bearing the disproportionate brunt of the economic pain in the country actually resides in leftist socialist policies. Let me give you an example. Unlike in the United States, in the private sector with employment contracts, there are two types of employees: there are the “Fijos” or the permanent workers, and then there are the non-permanent workers. Nonpermanent workers can be fired very easily and at almost no cost, however the “Fijos” or the permanent workers have to be paid a fairly large compensation package if they are fired.  It is not surprising that the majority of the permanent workers are people who are older.  The majority of the nonpermanent workers are young people just getting started and so in this recession when employees look to reduce personnel they don’t necessarily always fire the least productive employees.  They often will let go the nonpermanent workers over the permanent workers simply because the cost of firing nonpermanent workers are much less.

When we look at the public sector the difference is even more extreme and not surprisingly the left is implicit in this too left.  It would have been extremely cathartic and productive for the Spanish government to fire the bottom 20% of non-productive civil servants.  It would have eliminated a lot of deadwood and it would have also sent a wonderful message to the 80% of existing workers that they actually need to put in a good days work if they want to keep their job, just as in the private sector.  But of course the government did not do that.  Everyone who is a civil servant will remain a civil servant with a job for life no matter what their level of productivity or professionalism.  The end effect of this is that during a period of austerity the only way that the government can hope to save costs is to hire no new government workers which effectively blocks the ability of young people to get jobs in the government since new civil service positions are almost completely frozen for the foreseeable future.  If the government had decided to fire the bottom 20% of least performing civil servants that would’ve enabled a lot of employment to be produced for young people.

Finally the situation is further exasperated by the fact that this current generation coming-of-age has probably been the most indulged in to some degree pampered in a long time.  This current generation grew up in prosperity and was raised by overwork guilt ridden parents who too often decided to indulge their kids instead of giving them proper structure and reasonable tough love.  So what we have is in Spain is a situation where a passive and indulged generation is coming up against a particularly difficult and nasty employment situation made even worse by the inherent structure of the system in which older people who are entrenched in their positions have protections against being fired which consequently means that there are less positions available for young people.  In economics you can’t get something for nothing and if people who are middle-aged are more protected in their jobs then there’s going to have to be a corresponding and equally proportional pain among young people who are not so entrenched into the work.  So what we have now is almost a lost generation of young people huge numbers of whom cannot find work.  After three years of recession we are finally seeing the inevitable and not surprising expression of this frustration.  We will have to see if these  demonstrations continue and what if anything will be done to help the youth of Spain.

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