Magazine / Economy / Low wages / Article | 28/05/2008

Fed up with loans

Well-educated but deep in debt - Spain has witnessed the emergence of a new class of young low-income earners known as the "Mileuristas".

A new social class has emerged in Spain: the "Mileuristas" - well-educated young employees who have to make ends meet on a salary of around 1,000 euros per month.

Photo: Bratscher (Photocase)

Owing to the climb in the key interest rate for mortgages - the Euribor hit a record-high in May 2008 - many of them spend over half of their salary on mortgage payments.

The thousand-euroists

The term, which in English translates as "thousand-euroists", was coined three years ago by 27-year-old Carolina Algaucil, who first used it in a reader's letter she sent to Spanish daily El País. She defined this new social class on the basis of her own situation: "This is the young university graduate who speaks several languages and has a master's degree and other postgraduate qualifications in his pocket ... and yet earns no more than 1,000 euros." Many media took up the topic and published reports on highly qualified university graduates who could find no openings in their area, and who were forced by the swelling number of graduates to work in call centres or pizza services. Others lucky enough to get a job in their line were often offered short-term contracts and a miserable salary. Soon after, the catchword for this new class became the title of a book by author Espido Freire. Nowadays the thousand-euroists exchange tips on how to cut costs in their own Internet blogs.

Renting instead of buying

The number of young couples in Spain who take out mortgages to buy their own home is higher than in almost any other European country. A couple who took out a loan of 150,000 euros (with an average repayment period of 27 years) two years ago would pay monthly instalments of 615 euros - just about manageable for two Mileuristas. But because the monthly instalments were mostly linked to the rising Euribor prime rate, the same couple is now paying monthly instalments of 820 euros for the same loan. By the middle of the month many Mileuristas have no money left to live on. José Luis Rodríguez Zapatero's socialist government has reacted with a scheme aimed at encouraging the trend of renting accommodation instead of buying, thus providing a way out of the mortgage trap. Young low-income earners between 22 and 30 years of age who earn a maximum annual income of 22,000 euros before tax - a bracket which includes many highly qualified university graduates - now receive a monthly rent allowance of 210 euros from the state. Only one allowance per household is granted, for a maximum period of four years.

Poor researchers

A special group within the class of underpaid graduates is that formed by young Spanish researchers, who have organised themselves into a pressure group called "Los Precarios". The name was created by combining the words "precario" (precarious, poor) and "becarios" (interns). The aim is to call attention to the fact that many jobs in research go to interns who are comparatively poorly paid for their work. They contend that in reality this is nothing less than exploitation of highly qualified researchers.

Spain and Lithuania bring up the rear

Research is already focusing on the phenomenon of the mileuristas. A study published in October 2007 by GESTHA, the professional association of employees at the Spanish Ministry of Finance, found that around eleven million Spanish employees earn a gross salary of less than 13,400 euros per year. According to a study carried out by the European information network Eurydice in 2005, only 40 percent of Spain's university graduates find a job that is appropriate to their level of education. The study highlighted the level of unemployment among young Spanish university graduates, which at 11.5 percent is comparatively high. Together with Lithuania Spain brings up the rear in Europe in this respect, with the European average lying at 6.5 percent.

Tom Gebhardt

Born in Hanover in 1973, Tom Gebhardt is Spain correspondent for the eurotopics press review. He studied journalism in Germany before doing postgraduate studies in ...
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