One of the indicators that measures our development as a society is the ability to create value not only for present-day progress, but also, at the same time, to help the next generation so that they can improve the conditions of their own lives and their environment. In general, this has happened throughout human history, except in certain key moments, such as for Spain’s “Generation of ’98” who had to deal with the end of an empire, or in the case of serious crises, such as those triggered by the two world wars of the 20th century. Therefore, it is naturally expected that those who come after us live better than those who came before us.
The global economic crisis triggered by the Lehman Brothers collapse cut short the development of millennials: those born between 1981 and the end of the century. From being the best educated and trained generation in history, they suddenly became the first, since the two world wars, who were going to be worse off than their parents. Today they represent over 20 percent of the world’s population and will be the first group to suffer the effects of the two of the major crises in recent history: that of 2008 and the one triggered by the current pandemic.
In the last decade they began to enter the labor market, where they expected to have a fully developed professional career. However, the financial crisis abruptly drove them out of the labor market, with youth unemployment rates in some countries, for example Spain, reaching almost 50 percent. So, for over ten years they have suffered the consequences in terms of increased difficulties in returning to the labor market, dealing with extremely high levels of precarious employment due to the temporary nature of our labor model and salaries being dragged down lower than for previous generations.
All of this, of course, has an effect on income, which delays them being able to make the most important financial decisions. At the end of May, the Bank of Spain published a study on intergenerational labor trends in Spain showing that the salaries of those who have entered work in recent years are up to 25 percent lower than those who entered employment a decade earlier. In addition there has been an increase in part-time employment, adding to the precarious nature of the labor market. For example, 26 percent of workers with an average level of education between the ages of 20 and 29 are in part-time employment, compared to 12 percent 10 years ago, according to this same study.
The pandemic was not in the script. Now that we are beginning to get a degree of control over the virus in some countries, economic forecasts warn of sharp falls in GDP in the world’s main economies and major job losses. According to recent International Labour Organization (ILO) figures, one in six young people in the world have already lost their jobs and working hours for the rest have been reduced by as much as a quarter.
Nor does the situation look good for those who currently entering the labor market, because the economic scarring will last for some time. In an article on how to get your first job at the very worst time, the Financial Times recently referred to a report by the Resolution Foundation in the United Kingdom, which concludes that the “crisis cohort” that entered the labor market in the wake of the banking crisis “continued to face higher unemployment, lower pay and worse job prospects up to a decade later, compared to other young people entering work before or after the downturn.”
Progress in Western society has always been based on intergenerational solidarity, with it always being the older generation—our grandparents with our parents or our parents with us—who sacrificed the most so that their children could have better educational and career opportunities. Now it seems that the opposite scenario is becoming natural. We are making the youngest in society the victims of two successive crises: at present with worse jobs and salaries and in the future by condemning them to pay for the overspending in these times, with insufficient pensions.
Because of this, I believe that a major national agreement for the current employment of the under-40s should be promoted, in which social agents, government, companies and trade unions commit to a five-year plan with immediate training and recruitment measures, at the same time pushing for reform of public and private pension schemes, from which they will be the first beneficiaries. For those already trained and with proven experience, there should be concrete and specific plans for selection and recruitment, with explicit support from public administrations. Companies are aware of the shortcomings we have and we can strengthen our commitment without giving up on other generations of older workers. And for young people, now entering the labor market for the first time, there should be initiatives that they can use as a benchmark such as the “Action Plan for Youth” launched by the OECD a few years ago, with special emphasis on youth unemployment, and where education and, again, associated vocational training, are key.
Society will not improve if we do not work to look after those around us. Younger generations do not need more of our ‘understanding’ and are fed up with our reproaches. They need direct support from now on, or in a few years’ time our society may break down due to our lack of action.
As Unamuno, also from a lost generation, said, “We should try to be the parents of our future rather than the offspring of our past.” There is no doubt they need our help for this and we at MAPFRE are ready to offer it.