The generation of Spaniards aged up to 30 years is severely affected by the economic crisis caused by the corona pandemic. One in three young people in this age category has no income and no prospects for purchasing on the housing market.
A report by the Bank of Spain researched the impact of the corona crisis on the economic situation of young people. The generation already had a difficult time before the crisis because of the many part-time jobs and precarious employment contracts. In addition, many young people work in the most affected sectors such as tourism.
Younger generation suffer under ERTE scheme
People in their twenties were also less able to make use of the ERTE temporary unemployment scheme compared to their older colleagues; mainy as they more often have a temporary contract. A third of employees up to the age of 30 who lost their job in the second quarter of 2020 had a temporary contract versus less than 20% of employees over the age of 30.
For young people, the pandemic means a second major crisis, coming after the consequences of the previous financial crisis. They have barely benefited from the economic recovery in the years 2014 to 2019.
Education system also contributory factor
It is not yet known to what extent the lack of education since the covid-19 outbreak will affect the educational level of Spanish young people. Research in America and Belgium shows knowledge of basic subjects such as arithmetic and mathematics has decreased by 50%. If this situation also applies to Spain, it can be said to be a dramatic situation. Spain is one of the countries with the highest percentage of people in their twenties who have only completed primary education.
But the quality of secondary education has also been under discussion in Spain for years. Due to the relatively low quality of secondary education, ultimately too few academic students enter the labour market. Due to the strong competition from other EU countries, graduate students from Spain find it difficult to find a job.
Difficult to access housing market
All these factors do not make it easy for young people to stand on their own two feet. Low incomes and temporary employment contracts prevent access to the housing market. No fewer than 87% of all Spaniards born in 1988 still lived with their parents until their 26th birthday. That is 5% higher than those born in 1976 when they turned 26 years. 25% of this group now owns their own home versus 7% of the people born in 1988.
The difficulties are compounded because prices on the rental market have also risen sharply. Spain, together with France, is the European country where young people spend most of their income (30%) on rent.
The future does not offer this generation a bright prospect either. The pressures on the pension system from aging populations and a public debt that has risen to 120% of gross domestic product due to the pandemic will also hit this generation.