Written by Sanjeev Kulkarni, GEI Contributor
"Jobs losses have been especially acute in Southern Europe, but even Austria, Belgium, Germany, Luxembourg and Malta -- the only countries where employment has risen since 2008 -- are seeing signs that the labour market situation may no longer be improving."
The corresponding number in the U.S. would be about 20.7 million unemployed, based on total population ratios. This would produce a U-3 unemployemnt rate about 13.4% and a U-6 underemployment rate above 20% (assuming the number for part-time for economic reasons would be unchanged).
The report says that if proper measures are taken "recovery is still possible within a single-currency setting." A list of the things discussed includes:
- Repair of the financial system;
- Coordinated approach to sovereign debt problems and bank solvancy issues;
- Rebalancing current accounts within the Eurozone;
- Effective employment programs;
- Youth job guarantees; and
- Need for improved coordination between the Eurozone countries.
Some specific details from the report, which address austerity and worsening bank's balance sheet has added to the woes, call on moving ou of what the ILO calls the austerity trap. Some of the details:
- Repairing the financial system conditional on resuming credit to small firms. Making shareholders pay for the bailouts would not only be fair but also reduce the need for taxpayers money or further austerity measures.
- Promoting investment and supporting jobseekers, especially for young workers. A “youth guarantee”, at a cost estimated at less than 0.5 per cent of the Eurozone’s government spending could be quickly implemented. To fund this, there is a case for refocusing European Structural Funds and mobilizing the European Investment Bank.
- Addressing differences in competitiveness between Eurozone countries. This opens up a new opportunity for social dialogue to ensure that i) labour incomes grow in line with productivity in the stronger economies; ii) income moderation in deficit countries is complemented with policies to boost the industrial base; and iii) a downward spiral in wages and worker rights is prevented.
The following video summarizes:
John Lounsbury contributed to this article.
- Eurozone risks losing a further 4.5 million jobs: ILO News Release
- Job Crisis in Eurozone: Full ILO Report
- Job Crisis in Eurozone: Video Report