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.

LOng Term Europes Long Term Unemployed PIIGs vs Germany

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.