frontpage companies economy society technology politics world editorial ecology
"Unemployment=Crime"
Our Brussels Bureau
31 DEC
Bank of Espana is the latest bank to join the list of establishments facing the brunt youth wave hitting Southern Spain. This root cause of this social issue is the mass unemployment prevalent in Europe.The young are facing enormous obstacles as they enter the job market, leaving many of them deeply pessimistic about the future and leading some into lives of crime and violence.
The more profound issue confronting Europe is unemployment. At an average rate of 10%, it remains the scourge of the Continent. Its effects on society are far-reaching. In many countries, the young face enormous obstacles as they enter the job market, leaving many of them deeply pessimistic about the future and leading some into lives of crime and violence. Racism, as always, grows out of despair, mistakenly offering simple solutions to complex problems. Mass unemployment is not just a waste of human resources, it is Europe's most important challenge.
The roots of unemployment--inflexible labor markets, an overly generous social safety net and barriers to the creation of new businesses--are well-known, even if the debate concerning what to do about them is controversial because of the potential political and social implications. Europe rightly prides itself on its welfare system, mostly built up in the years of low wages, fast growth and dynamic demography following World War II. But once Europe became a high wage area with a graying population, the welfare system became an expensive source of unemployment. Well-intended measures, such as laws making it expensive to dismiss workers, offer protection to some, but hurt others. The situation is politically tricky because those who benefit from these measures adamantly support them, while those who are losing out do not understand why laws designed to protect jobs prevent new employment from being created. This scenario is further aggravated by the fact that sharing a currency means that each country gives up the possibility of fixing its cost problems by devaluing its currency.Wage settlements are no longer a strictly national affair, but after E.M.U. have depended in large part on what's going on elsewhere. Ultimately, the value of the euro is such that countries with average production costs are just about competitive. A bonus accrues to those that do better than average, while those that do worse face the prospect of painful job losses.
Yet dealing with unemployment is the defining challenge for Europe. And for E.M.U., it could well turn out to be a make-or-break proposition, if only because it has been oversold to a wary public as a panacea for all the E.U.'s economic woes.
    |
|
|
