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.
Chris Hohn the founder and manager of TCI Fund Management was the star speaker at this year's London Value Investor Conference, which took place on May 19th. The investor has earned himself a reputation for being one of the world's most successful hedge fund managers over the past few decades. TCI, which stands for The Read More
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.