When Alvaro Garcia left school in 2008, his future looked bright. Spain’s economy was booming. Unemployment had fallen below 10 per cent for the first time in living memory. And for the first time since records began, Spain went from receiving far more immigrants in search of a better life – 600,000 in 2006 alone – than there were emigrant Spaniards leaving Spain for the same reason.
Six years later, a university graduate and unemployed in Madrid, Alvaro belongs to Spain’s lost generation.
In January this year, one out of every four adult Spaniards was out of work. Even after five years of recession, the International Monetary Fund warned that it may be five years more before the unemployment rate falls below 25 per cent and the number of unemployed people in Spain falls below 6 million.
Suicide rates are on the rise, Spain’s young professionals are fleeing the country and Oxfam has predicted that 18 million Spaniards – a staggering 40 per cent of the population – are at risk of social marginalisation within the next decade. Even the Spanish government acknowledges that it will be 10 years before the economy can recover the more than 4 million jobs lost during the recession.
”I call this Spain’s Great Depression,” says Francisco Comin, professor of economic history at the University of Alcala de Henares, near Madrid.
”In terms of duration and decrease in activity, it is only comparable to the Civil War [1936-1939] and the postwar era.”
But it is Spain’s young people in particular for whom the most recent figures are truly apocalyptic: 57.7 per cent of Spaniards aged between 15 and 24 cannot find work. Move the goalposts a little and the improvement is negligible – about 45 per cent of those under 30, almost 2 million young people, are unemployed. ”The damage is done,” says Alvaro Garcia. ”Ours is a lost or wasted generation. Lost because we naively believed the politicians when they told us that things would get better. Wasted because we have lost so many who had no choice but to leave Spain in search of a better life.
”The hope of finding work is next to zero. What used to be normal – a job that allowed you to be happy and independent, to live in your own home – these things are chimeras, shadows from a recent past that now seems utterly unattainable.
”Every day I talk with my friends, all of whom have university degrees. And we always finish the conversation in the same way, with the same question: ‘How on earth did it come to this?”’
If one moment came to symbolise the fragility of the Spanish economy’s boom years, it came late in 2008. For months, the socialist government of prime minister Jose Luis Rodriguez Zapatero, newly re-elected to a second four-year term in March of that year, had been refusing to admit that Spain’s economy was in trouble, as if hoping that the looming global financial crisis would all go away. And then, in just one month, Spain’s unemployment rate leapt from seven to 16 per cent.
In truth, however, the perfect storm that would sweep away the prosperity of an entire nation had been brewing for far longer. For more than a decade, about a quarter of Spain’s economic output revolved around tourism and construction, two industries highly susceptible to downturns in the international economy.
In the Extremadura region in Spain’s west, where a massive fall in tourist numbers hit especially hard, the base unemployment rate is 33 per cent, with two-thirds of Extremadura’s young people without work.
”It has been a terrible few years, a catastrophe, especially here in Caceres where the economy is built around the services industry,” says Rafael Navas, a hotel worker in Extremadura’s regional capital.
”There’s nothing else here. There are plenty of young people here – people with a university education – who have simply given up hope.”
But it was construction and a lucrative, if unsustainable property boom that drove the Spanish economy’s spectacular growth.
”We spent a lot of talent and resources generating a productive capacity that we didn’t need and we are now left with skeletons of buildings and infrastructures,” says Jose Antonio Herce, professor of economics at Madrid’s Complutense University.
”The dismal allocation of resources during the boom years is coming back to haunt us horribly now.”
Symbols of the boom years are everywhere visible across Spain’s urban landscape, from entire suburbs of empty apartment blocks to massive infrastructure projects that remained unfinished after the money ran out.
Take, for example, Spain’s first private airport that was built near Ciudad Real, a provincial town of 75,000 people about 200 kilometres by road south of Madrid.
Amid as much unease as fanfare, the airport opened in December 2008 at a cost of €1.1 billion. Its 4.4-kilometre runway was Europe’s longest, long enough even for an Airbus 380, and the airport had a carrying capacity of 10 million passengers a year.
The only problem was that no one could quite work out why 10 million people would want to fly to Ciudad Real. Three years after the airport opened, the airport’s operator went bankrupt and the few airlines to have used the airport took their business elsewhere.
Since then, the only people working at the airport are painters who paint giant yellow crosses along the runway lest pilots confuse the airport with that of Madrid. Last month, the airport was put up for sale at a bargain basement price of €100 million ($153 million).
In such poorly conceived follies lay the seeds of the crisis confronting Spain’s young and unemployed. Inflated wages and an abundance of work on projects such as these encouraged many young Spaniards to leave school early, safe in the knowledge that they could earn $3000 a month as unskilled labourers on construction sites.
But when the property bubble burst these young people were cast adrift into a profoundly depressed jobs market without even a high-school diploma and with little prospect of being retrained. It is these young people that make up almost half of Spain’s unemployed young.
The disproportionate reliance on tourism and construction and the massively wasteful practices of Spain’s private sector were not its only problems.
According to Spain’s Instituto Nacional de Estadistica (National Statistics Institute), Spanish wages actually fell during the boom years – in 2002, the average Spanish wage was $30,230 per annum, compared to $30,045 four years later. It was during this period, in August 2005, that a young Spanish woman named Carolina Alguacil wrote an impassioned letter to Spain’s El Pais newspaper complaining that Spain’s young workers were being left behind.
Her plea, and her coining of the word ”mileurista” (those who earn less than €1000 or $1526 per month), became something of an anthem for Spain’s young and, in many cases, soon-to-be-unemployed.
She was, she wrote, ”a young university graduate with foreign languages, postgraduate studies, masters degrees and courses under her arm who earns no more than €1000. Who spends over a third of her salary on rent, because she likes the city. Who doesn’t save, doesn’t own a home, car, or have any children; who lives from day to day. Sometimes it’s fun, but it’s starting to get tiresome.”
An estimated 12 million Spaniards now survive on less than $1526 a month. Eva Caballero, a 28-year-old administrative assistant and IT worker who lives in Madrid, takes home $1250 a month and is typical of Spain’s mileuristas.
”We’re not a lost generation, but a creative one, one that has learnt how to make more out of less, to enjoy the simple pleasures that we had forgotten in our consumer-oriented society.”
But such noble sentiments quickly turn to anger.
”We have our values but we no longer believe in the politicians. We have our qualifications but we have no way to use them. What other choice do we have but to resign ourselves to our fate and become bitter?”
That these are the lucky ones who actually have jobs goes a long way towards explaining why the malaise at the heart of the Spanish economy runs deeper than the frightening statistics of youth unemployment.
”Either we accept precarious [and sometimes even humiliating] working conditions here, or we have no choice but to look for opportunities elsewhere,” is how Alvaro Garcia puts it.
Some long-term consequences of this brain drain can be cast in numerical terms. The exodus of Spanish doctors and nurses, for example, has led the Spanish Health Ministry to warn of a shortfall of 25,000 trained medical professionals by 2025.
In January, a survey by a major think tank of 1000 young Spaniards between the ages of 18 and 24 found that more than half believed that they would never own their own home or start their own family. Sixty-one per cent expected that they would have to leave Spain to begin a new life.
Other impacts from Spain’s economic malaise are less easy to quantify.
Spain’s crisis could leave an entire generation ”very seriously scarred”, according to Jose Salazar Xirinachs, director of employment at the International Labour Organisation.
”We know that for those who don’t start well in the labour market, those who take a long time to find their first job, these things have a big influence on the type of work and level of income they achieve for the rest of their lives.”
If there is any silver lining to the current crisis, it lies in the birth of a new kind of politics. On May 15, 2011, a group of protesters occupied Madrid’s central Puerta del Sol square to denounce the economic policies of Spain’s two major political parties.
A forerunner to the worldwide Occupy protests, the Madrid protesters – who became known as los indignados, those who are indignant – remained for months and spawned a politics of grassroots activism that continues to this day.
The vast network of neighbourhood co-operatives that were born out of the protests now prevent police from evicting home owners who have defaulted on their mortgages and run community food kitchens to supplement social security payments that are either inadequate or nonexistent.
They have even forced Spain’s lower house of parliament to debate a reform of legal provisions that require those who default on their mortgages to both surrender their houses to the banks and continue paying their mortgages.
There are also signs that the Spanish economy is improving. Earlier this month, economists at BBVA, Spain’s second-largest bank, forecast an annual growth rate of 0.9 per cent for 2014. Javier Hernandez, a funds manager working in Madrid told The Age that ”the money markets have started to move. People are starting to invest and confidence is coming back. It’s very slow, but this is always the first sign, like the canary in the gold mine.”
Pedro Alcantara, a restaurant owner in Madrid, says there are other intangible signs that the economy has turned the corner.
”I don’t know what happened but it began to turn around late last year. People started going out to eat again. Maybe everyone just reached a point where they just threw up their hands and said, enough! Whatever the reason, there has been a change, even if it is a small one.”
But such signs of meagre improvement offer small scraps of consolation for young people like Alvaro Garcia: ”Our generation is already lost. My only hope is that if one day I have a son or a daughter, they don’t have to suffer the injustices that have come to mark our generation.”
Anthony Ham is a Melbourne journalist.