…which is also distinctively severe
For a generation, growing up in Europe has meant a distinctively high risk of long-term unemployment, a problem that has not afflicted other advanced societies to the same degree
We can delve further into these figures by comparing the rates of long-term unemployment in the 12 EU countries with independent countries for which there is age-specific data over the years 1993 to 2013. Switzerland and Singapore cannot therefore be included in this comparison.
The results are given in Figure 23.1. Long-term unemployment is here defined as being unemployed for a year or more, and is expressed in the figure, first in the darker lines, as percentages of the total unemployed in the two groups of countries, and second in the lighter lines, as percentages of all the unemployed 15-24 year olds.
Throughout these years, the proportion of the unemployed of all ages suffering this fate in the EU 12 has been a substantially larger proportion than in the eight independent countries; more than three times larger in the early years, peaking at four times larger in 1998, and then declining reaching its lowest point in 2010, immediately after the financial crisis. The average of the EU weighted mean over the 21 years in the EU is 43.6 per cent, while that of the independent countries is 16.4 per cent, so on average the EU rate has been well over double. That such a large difference has continued over 21 years, reinforces the impression that we are dealing with two sets of economies that differ from one another in some fundamental and enduring manner, which does not seem altogether consistent with the vaunted ‘social model’ of some EU countries.
When comparing the 15-24 age group, we may first observe that in both cases the rates are at least lower than their elders, but the difference between the EU and the eight independent countries is no less stark. It peaked at five times higher in 1996, and only fell below double the rate in 2010 through to 2013. The average in the independent countries over the 21 years was 10.4 per cent, and in the EU 29.9 per cent. Coming of age and entering the labour market has been a stressful and depressing experience in the EU, and its young people have been almost three times more likely to experience a year or more of unemployment than those in the eight independent countries.
Table 23.1 shows that the weighted means used in the graph are not hiding major variations within each group. Only one EU country, Denmark, has had a lower proportion of long-term unemployed than the mean of the independent countries. Its record over all 21 years is quite distinctive compared with other EU members, but over the four years 2008-2011, and again in 2013, it achieved what no other EU country has ever been able to do: the proportion of its unemployed who remained unemployed for a year or more, was lower than the mean proportion of the eight independent countries.
There are also noticeable variations among the independent countries. Over all 21 years, a distinctively high proportion of Japan’s unemployed have been long-term. By itself, given its size, Japan has been responsible for boosting the weighted average of the group as a whole. By contrast, the US has had a remarkably low proportion of long-term unemployed until 2010 when the proportion shot up, and has remained high until 2013. However, the main point is that over the 21 years not a single independent country has ever had a proportion of long-term unemployed as high as the mean of EU countries, a quite remarkable contrast.
The EU has, therefore, not only suffered from a higher rate of unemployment than independent countries, but its unemployment has been especially severe, as measured by the proportion unemployed for a year or more; especially among young people. The average of the weighted means over the 21 years indicates that about 10.4 per cent of young unemployed people in the independent countries remained unemployed for a year or more, whereas 29.9 per cent of young people in the Single Market countries did so. They have been, in other words, nearly three times more likely to be scarred by this experience.
As the Eurozone crisis has unfolded, UK media has given increasing attention to the previously unimaginable rates of unemployment found in some EU countries, and especially among young people. However, the experience of long-term unemployment is not simply the consequence of that crisis. As the light blue line in the graph indicates, although the rate of long-term unemployment in the 15-24 year old cohort was declining over the years 1997-2008, it was always at a higher level than in the independent countries over the pre-crisis years. While recent rates of long-term youth unemployment are astonishingly high, they were almost as high in some countries over the first decade of the Single Market. Unnoticed by the UK media, well over half of young, Italian men and women were unemployed for more than a year over the 11 years from 1993-2003, as were over half of young Greeks over the five years from 1996-2000. More than a third of young people in several other EU countries – Ireland, Portugal, and Spain – had a similar experience, and even, surprisingly, though for fewer years, Belgium and the Netherlands.