Europe’s Long-Term Unemployed: Germany Vs PIIGs first appeared on FloatingPath
As the number of long-term unemployed workers increases in an economy, the labor market becomes structurally damaged in ways that might have otherwise only been cyclical shifts. Certain workers unable to find a job and become rusty, mismatched, and unmarketable as employers in a recovering economy are only looking to make low-risk hires.
The economic stability of the labor market in particular in Europe has worsened as the percentage of the labor force that is long-term unemployed grows. Germany is one nation that has made a recovery. In 2012 only 2% of their labor force was long-term unemployed, a decrease from around 5% in 2007.
But Greece, whose struggles can’t be understated, had a long-term unemployment rate of around 14% in 2012. Ireland, Spain, Italy, and Portugal in fact all had far higher rates of long-term unemployment last year than they did at the start of the global recession.
Further, consider that some portion of the long-term unemployed, a percentage that is presumably higher than the general unemployed population, will give up looking for work and drop out of the labor force entirely, thus decreasing the long-term unemployment rate. These figures present a rosier picture than may be the reality.