S Europe's lost generation stuck in junk jobs

Updated: 2011-10-18 11:15


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S Europe's lost generation stuck in junk jobs

A protester carrying a banner that reads "No home, no job, no pension, no fear" withdraws money from an ATM machine of a bank next to graffiti sprayed by other protesters during a demonstration in Madrid April 7, 2011. [Photo/Agencies]

MADRID - Silvia knew things would be tough, but never like this.

With a masters' degree in publicity, the 24-year-old has been working for more than two years, full-time, in an internship that is starting to feel like it will never end.

Paid 300 euros a month for the same work as the salaried public relations professionals who sit next to her, she doesn't earn enough to move out of her parents' house and her bus pass and lunch expenses eat up most of her pay.

But despite feeling her multinational employer is flouting rules that limit the use of worker contracts with no benefits, she's not about to complain to the labour office since she considers herself blessed to have a job at all.

"Since I was little my parents urged me to get a university degree to find good work. But I'm lucky to have any work at all. There were 30 of us in my graduating class and I'm one of the ones who is doing the best with their career," Silvia said. She did not want her last name used in case of repercussions at work.

With Spain's youth unemployment higher than 40 percent and its overall joblessness the highest in the European Union at one in five, young professionals accept any conditions as they try to start their careers.

The story is much the same in neighboring Portugal and Italy where more and more people have so-called junk jobs: temporary contracts that used to be common in tourism, farming and construction but are now used by all kinds of companies.

With the economy sluggish and the euro zone debt crisis strangling credit, businesses are keener than ever to avoid open-ended contracts with expensive severance pay.

A quarter of Spain's workforce is on temporary contracts, as is 23 percent of Portugal's, compared with a European Union average of 14 percent.

In Spain, Portugal and Italy, a rigid dual system has emerged. Middle-aged people have stable jobs with benefits. They are expensive to fire and protected by masses of legislation. Meanwhile, younger workers are stuck in a revolving door of temporary contracts that are easy to abuse.

The two-track job market is stunting economic growth, studies show. Temporary workers get trapped for longer and longer periods without benefits, which affects output and makes southern Europe less competitive.

"You cannot just leave one segment of the labour market fully untouched and not motivate people to go to the job where they fit best... you might create employment in the short term but in the end it's a dead-end road," said Ton Wilthagen, a labour expert at Tilburg University in the Netherlands.

1000 Euros a month ain't so bad after all

The curse of the mileurista -- the Spanish-language term for a temporary worker who earns a thousand euros a month without benefits -- is not new. Young professionals in southern Europe have found a permanent position elusive for some time.

But the lost generation has wandered deeper into a maze as the euro zone debt crisis intensifies. Economic growth is slowing again and public sector jobs are disappearing as governments try to bring huge public deficits under control.

"We used to talk about mileuristas like it was a bad thing. Now it's good. A 1000-euro a month temporary contract is decent," said Jose Maria Marin, labour expert and contemporary history professor at Spain's National University of Distance Education.

In Rome, 27-year-old Federico has moved from one temporary job to another since he graduated in history in 2009. A 1000-euros-a-month is starting to look like an unobtainable dream.

"I was interviewed today for a one-year job but I didn't like it because they were offering me 500 euros a month to work 10 hours a day," said Federico, who did not want his last name used since prospective employers could search for him on the Internet.

So far he has held out for a job in his chosen field of media or marketing. He wants to move out of his parents' house but he needs a permanent job contract in order to sign a rental agreement. With more than a quarter of Italians from 15-24 years old out of work he's starting to get desperate.

"Sometimes I feel frustrated, and I start to send off lots of CVs, even to companies I don't like, just so I have more chance of finding something," he said.

The phenomenon of young people living with their parents is another thing holding back economic growth, creating a vicious cycle for job creation. If they were setting up new households they would be stimulating the housing market as well as consumer spending.

Another risk for economies with high percentages of temporary workers, notes Wilthagen, is that banks are shy of lending to people without permanent employment, further holding back consumption.