Signs of Improvement: EU Unemployment at its Lowest

The EU unemployment rate was 7.1 % in the first quarter of 2018, almost on par with the 6.8 % rate recorded during the European financial crisis in the first quarter of 2008.

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Signs of Improvement: EU Unemployment at its Lowest
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The unemployment rate in the European Union is at its lowest in almost a decade. According to a Pew Research Centre data analysis reveals a steady decline from 2013 to 2018. The EU unemployment rate was 7.1 % in the first quarter of 2018, almost on par with the 6.8 % rate recorded during the European financial crisis in the first quarter of 2008. But joblessness varies widely among the 28 member countries. The report states that the overall unemployment rate fluctuated during the EU financial crisis that spanned two recessions.

National differences in economic performance show varied unemployment across the EU. “In the first quarter of 2018, the Czech Republic, Germany, Hungary and Poland had the lowest unemployment rates, while Greece, Spain, Italy, Croatia, and Cyprus had the highest.” Spain, Portugal, and Ireland show the largest percentage-point decreases. “Youth unemployment in the EU has also dropped to pre-recession levels. At the beginning of 2018, the unemployment rate among workers ages 15 to 24 (15.6 %) was the same as at the start of the recession in the second quarter of 2008.” But youth unemployment remains high in parts of Europe.

Youth unemployment has increased substantially across the EU since the financial crisis. A report by UK’s leading progressive think tank, the Institute for Public Policy Research says the poor performance of recessionary economies in Europe has had a negative impact on youth employment. It has reduced business demand for workers, thus the drop in the number of vacancies. “The economy has undergone fundamental structural changes. The types of industries and occupations open to young people now are very different.

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In most labor markets there have been distinct shifts away from manufacturing and towards services, and away from jobs in the middle of the skill distribution and towards both low and highly-skilled roles.” The report highlights the economy shift’s direct impact on vocational education. “Part-time work is growing increasingly prevalent among the young unemployed. This is partly related to increased participation in education, with young people looking for work that can fit around studying.” Data from Sweden and France show there is a substantial shortage of full-time opportunities for the youths.

A major contributing factor is employers bypassing stringent employment regulations that govern permanent roles. But the deteriorating financial condition brought about businesses doing away with their temporary workforce.

Marianne Thyssen, the Commissioner for Employment, Social Affairs, Skills and Labour Mobility said the European economy was growing at its fastest. “It favors employment, props up household incomes and improves social conditions.” She said the technological change was boosting growth and bringing about employment opportunities. The International Labour Organization highlights that employment has been expanding but wage growth remains subdued. This constrains further improvement in aggregate demand in the labor market. The EU has to generate more jobs for the livelihood of its people and implement people-friendly policies to navigate through tough times.