Italy's Youth Unemployment Rate is 40 Percent; Germany's is 8 Percent
Recovery in Germany Is Faster Than Elsewhere
May 10, 2013New York Times - The recovery from the Great Recession has been slow, or even nonexistent, in most of the developed world.
But not in Germany.
In Germany, alone among the 27 members of the European Union,
unemployment rates for both older and younger workers are now lower than
they were when the United States slipped into a recession at the end of
2007.
In the rest of the euro zone, the unemployment rate for workers ages 25
to 74 has more than doubled over that period, to 12.8 percent. The rate
for younger workers is more than 30 percent, on average — and above 50
percent in Spain and Greece. In Germany, it is less than 8 percent.
The accompanying charts show how unemployment rates for both groups of
workers have changed in each of the 17 countries in the euro zone, as
well as for Britain and the United States.
In terms of adult unemployment rates, the most recent figures for the
United States (6.1 percent) and Britain (5.7 percent) are not that far
from Germany’s figure of 5.1 percent. The major difference is in youth
unemployment, which is above 16 percent in the United States and above
20 percent in Britain.
What accounts for that difference? Some of the credit goes to Germany’s
education and employment system for young workers, and to German
policies that encourage employers facing downturns to reduce working
hours rather than fire workers. In Germany, students are separated into
different career tracks, with many put into a system that leads to
apprenticeships rather than to college degrees.
But that is not the entire story. The euro zone’s troubles have helped
Germany’s export-oriented economy. The weak euro has made Germany’s
exports more competitive against those of countries with which it
competes, most notably the United States and Japan. Since the end of
2007, the euro is down about 10 percent against the dollar and about 20
percent against the yen.
Were the euro zone to break up, there is little question that the value
of a new German mark would rise sharply, while the currencies of many
other members of the zone would fall relative both to the mark and other
international currencies. That would depress German exports.
The charts reflecting Germany’s unemployment rates, if they were the
only evidence available on world economic trends, would seem to indicate
there was a mild downturn in 2009 that soon ended, with the economy
recovering the next year. The United States charts would indicate a more
severe downturn, followed by a recovery that began in 2010 and may now
be gathering strength. In Britain, there has been much less progress
since unemployment peaked in 2011.
In the 16 other euro zone countries as a group, the chart indicates a
deep recession that leveled off in 2010 and 2011 but has since gotten
much worse — particularly for young workers.
“We will have to speed up in fighting youth unemployment,” the German finance minister, Wolfgang Schäuble, said at a conference this week, “because otherwise we will lose the support, in a democratic way, in some populations of the European Union.”
If that is to happen, it may require a change of course for Europe, where it appears the rich will continue to get richer. The European Commission’s latest economic forecast,
released last week, predicted declining unemployment in Germany this
year and next, but said joblessness was likely to continue to climb in
France, Italy and Spain.
Italy aims to axe youth jobless rate below 30 percent: PM
June 1, 2013
Reuters - Italy's Prime Minister Enrico Letta said on Saturday his government aims to reduce youth unemployment to below 30 percent in the next few years with a mixture of fiscal breaks and different contracts for young employees.
Reuters - Italy's Prime Minister Enrico Letta said on Saturday his government aims to reduce youth unemployment to below 30 percent in the next few years with a mixture of fiscal breaks and different contracts for young employees.
Italy's overall jobless rate and youth unemployment edged up in April to the highest levels on record, data showed on Friday, with the youth jobless rate at 40.5 percent. Reducing unemployment in the midst of Italy's longest recession since World War Two is likely to be no easy task.
"Our goal is to bring the youth unemployment below 30 percent," Letta said speaking in the northern city of Trento.Letta, who came to power in April after two months of political deadlock, has made tackling unemployment a priority and pushed for it to be a central theme at a European Union Council meeting at end-June.
"Middle-aged people in Italy are currently saving money to build a safety net for their children as they fear they will not find any job, this is freezing consumption and investment," he said in an appearance at the city's annual "Economic Festival".He said the government was pondering a "generational handoff plan" under which older employees would reduce their work hours while mentoring younger people entering the rigid job market.
"We will focus on reducing taxation for those getting their first job and cutting taxes on labor in general," he said, adding the government is also studying how to change laws that limit the use of temporary employees and regulate apprentices.
Employers would pay younger staff less, while older workers would get full social security contributions funded by the government.
The number of people aged between 15-29 years that are not in education, employment or training in Italy rose by 21 percent from 2008 to 2012, to 23.9 percent.
Letta pledged his coalition government will draft a national plan against unemployment before the EU summit in order to foster open discussion among EU leaders.
"The June summit should launch a strong message to European citizens about policymakers' commitment to tackle youth unemployment," Letta said. "If we talk only about the banking union citizens will revolt against us," he said.Letta said he does not want to renegotiate the so-called 'Fiscal Compact', which encompasses the stricter fiscal rules drafted by the euro zone countries as a reaction to the sovereign debt crisis.
Europe needed institutional reform, Letta said, suggesting the direct election of the president of the European Commission, and a European finance minister and foreign minister and an European army.
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