Friday, November 22, 2013

Work’s New Age in Europe? Yes - And It Makes American Unemployment Look Great

Last Friday, The New York Times published a stunning graphic.  It showed the unemployment rates for young people in 11 European countries, comparing 2008 and 2013 and including where the United States fits in.

Joblessness among Americans aged 15 to 24, not including full-time students, was 16% for the year ending in June.  That’s way, way too high, and, after correcting for different measurement practices, may even be higher than the overall rate in 1933, the worst year of the Great Depression.  Despite a general fall in official unemployment since then, it has rocketed up from the 10% measured from July 2007 through June 2008.  It’s also much better than many other developed countries.

Great Britain, which has avoided the worst of the eurozone’s economic problems by keeping its own currency, has 21% of its 15 to 24-year-olds officially jobless.  Belgium, long regarded as one of the more solid countries using the Euro, is at 22%.  France, a large, diverse country of 66 million, has reached 25%.  But wait – except for Austria, Germany, and The Netherlands, with 8% to 10%, these are the good ones.  Ireland has 29%.  Italy has 38% of those under 25 and willing to work not finding it.  Portugal has no jobs for four young people in ten.  In Spain, which has a population of 47 million, 55% – over half – of those 15 to 24 count as officially unemployed, which is almost as high as Greece’s 58%.

It is true that the youngest workers are often not welcome in the workforce, especially at career jobs.  But the next generation up also has severe problems.  Unemployment in the eight troubled European countries above for those 25 to 29, when the massive majority of those in the United States are able to work in some form, ranges from 8% to 41%.

It’s hard for most modern-day Americans to even comprehend these percentages.  Joblessness in the Great Depression, still thought of as a time of hoboes, bread lines, and people taking opportunities far from home, peaked at less than 25%, even though it was assessed more liberally than today.  That meant three out of four people in the labor force were still on the job.  In most of our lifetimes, Detroit’s 17% rate in the early 1980s is the worst a large American city has been – tough times, with auto-related manufacturing positions disappearing to other domestic sites, various foreign locations, to automation, and to sheer lack of customers – but they have nothing on what’s happening to young Europeans now.

The closest we have had in this country to these jobless rates is the situation with some inner cities and some populations.  Even in the good times of 1990, two Chicago neighborhoods, Woodlawn and Oakland, had employment (not unemployment) rates of 37% and 23%, causing people to essentially give up on earning a living and move instead to drinking excessively, using illegal drugs, smoking at high rates, eating unhealthy foods, watching prodigious amounts of television, and general apathy.  As of 2009, 57% of black American males aged 16 to 19 were jobless – it is not a coincidence that, earlier that decade, more college-age black men were in prison, on parole, or dead than in school.   In Work’s New Age, I wrote that as joblessness seems both expected and unavoidable, more of our countrymen will, like the Jamaican Rastafarians, develop lifestyles and habits, not all constructive, appropriately adapted.

Why is half of Europe doing so much worse than we are?  It is tempting for me to blame higher minimum wages, as I do not support them in a time of fewer and fewer jobs, but they are not the primary culprit.  True, some of the countries above guarantee workers much more – at current exchange rates, France’s is $12.70 per hour, Belgium’s $12.28, Ireland’s is $11.65, and Britain’s $10.52.  Yet Greece, Spain and Portugal, the three worst off, have minimums of $5.31, $5.85, and $4.39, all well below America’s $7.25, and Italy has no national floor.   Several of these countries are officially in recession, which the United States is not.  The impact of automation is as strong in Europe as here, and its susceptibility to losing jobs elsewhere, with poorer countries closer, may be worse. 

Beyond the often-mentioned and true problem of a generation being permanently hampered financially by not being able to start careers earlier, what can we take away from Europe’s youth unemployment crisis?  We have five things.  First, when accounting for the permanence of the jobs crisis, these are good times, not bad ones, for the United States right now.  Second, the difficulties we face are hardly peculiar to us, or even to our political decisions.  Third, we are all in this together.  Fourth, with education levels ever rising on both sides of the Atlantic, degrees are less likely to come with success guarantees than ever.  And fifth, we had better be aware that our next recession, which will come sooner or later, may well be devastating.    

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