Labour Pains_Economist_02-12-1994

Labour - The Economist Saturday Schools Brief Labour pains UNEMPLOYMENT is costly in many ways Apart from the human suffering the economy as a

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1 The Economist Saturday, February 12, 1994 Schools Brief: Labour pains UNEMPLOYMENT is costly in many ways. Apart from the human suffering, the economy as a whole suffers through loss of output and the cost to taxpayers of welfare benefits. Yet despite such waste and despite reams of learned economic articles, governments have failed to solve the problem. Few people remember when unemployment in OECD countries averaged a modest 2-3% of the labour force during the 1950s and 1960s. Today, a record 35m people, or 8.5%, are on the dole, up from 25m as recently as 1990. Some countries have been hit harder than others: Japan's official jobless rate is only 2.9%, Spain's is a horrendous 23.1%. Indeed, Europe as a whole is an unemployment black spot: the average jobless rate in the European Union (EU) is expected to hit 12% this year, almost double America's 6.5%. It was not always so. In the 1960s and 1970s America's unemployment rate was twice Western Europe's (see chart 1). (chart 1 omitted) It is only since the early 1980s that Europe has had a higher rate than America. While America's current jobless rate is slightly lower than in 1980, Europe's dole queues have lengthened unremittingly over the past two decades, from 2.4% in 1970, to 6% in 1980, to almost 12% now. Movements in unemployment reflect the difference between the growth in the labour force--ie, people who are looking for jobs--and the change in employment. The size of the labour force depends on the growth in the population of working age and the proportion who want to work. More women, for example, have joined the labour force over the past few decades. The faster the growth in the labour force, the faster employment must grow simply to hold unemployment steady. Demographic changes are therefore sometimes blamed for the rise in European unemployment over the past decade. Europe's labour-force growth did accelerate in the 1980s as the baby boomers of the 1960s became job-seekers. But this does not explain the different paths of unemployment in different countries: the labour force in the EU actually grew more slowly in the 1980s (0.8% a year) than in America (1.7%). Europe's big problem has been its failure to create jobs. Since 1960 employment has risen by 84% in America and by 46% in Japan; over the same period, European employment has risen by a paltry 6% (see chart 2). (Chart 2 omitted) Countries measure unemployment in different ways, so national jobless rates are not always strictly comparable. One method of compiling the figures, used in America, is
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/02/2010 for the course BUAD 350 taught by Professor Safarzadeh during the Spring '07 term at USC.

Page1 / 3

Labour - The Economist Saturday Schools Brief Labour pains UNEMPLOYMENT is costly in many ways Apart from the human suffering the economy as a

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online