AT A GLANCE

  • Unemployment in the Eurozone was 11.5% in November 2014, up from a low of 6.8% in the first quarter of 2008
  • In the EU as a whole, youth unemployment stood at 21.9% in November 2014, costing the EU approximately 150 billion euros per year in lost wages and spending
  • The Euro recently dropped to below $1.1789, the price at which it started when the currency was introduced in 1999

 

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Feb 01, 2015

Checking in on the European Labor Market

In 1997, the European Union (EU) held its first summit on growth and jobs, and EU unemployment was 11 percent. Since then, not much has changed – unemployment in the Eurozone was 11.5 percent in November 2014, up from a low of 6.8 percent in the first quarter of 2008. Eurostat, the EU statistics agency, estimates that 184 million people were out of work in the euro currency area, which then consisted of 18 member states. In the wider 28-country European Union, the unemployment rate dropped to 10 percent in November 2014, or 24.4 million unemployed people. The highest rates were recorded in Greece and Spain, while the lowest were in Austria and Germany.

Of particular concern is youth unemployment. In the EU as a whole, youth unemployment stood at 21.9 percent in November. According to one study, this costs the EU approximately 150 billion euros per year in lost wages and spending. Sweden, which has one of the EU’s highest employment rates, has a youth unemployment rate of 23 percent. And in Spain and Greece, youth unemployment is above 50 percent.

Youth Unemployment in Europe, May 2014

Youth Unemployment in Europe, May 2014

Source: Statista

The Euro has also recently dropped to below $1.1789, the price at which it started when the currency was introduced in 1999. Policymakers at the EU’s central bank are debating plans for 500 billion euro in possible government bond purchases, which many believe is necessary to break Europe out of its ongoing economic stagnation.

Germany

In Germany, unemployment fell to a record low in 6.4 percent in December from 6.5 percent in November. Economists say this signals that growth in Europe’s largest economy will accelerate in 2015. According to the Federal Labor Agency in Nuremberg, the number of people out of work fell 27,000 in December to 2.841 million.

German Employment

German Employment

“Germany’s buoyant labor market continues to be a reliable driver of growth. The tightness of the labor market backs household confidence and supports wage growth and thus private consumption.”

Germany: Permanent and Temporary Employment

Germany: Permanent and Temporary Employment

France

According to the latest figures from Prism’Emploi, the French Association of Employment Agencies, temporary employment across France decreased by 2.7 percent in November 2014, compared to a year ago.

This decrease is attributed to a drop in the number of skilled blue-collar workers in the country. In contrast, there has been an increase in the number of white-collar workers by 3.2 percent, unskilled blue-collar workers by 5.6 percent, and managers and executives by 6.9 percent.

Employment in France

Employment in France

Italy

Italy’s unemployment recently rose to a record high of 13.4 percent. Meanwhile youth unemployment jumped to 43.9 percent in November 2014 from 43.3 percent in the month before.

At the end of December, the Italian cabinet approved parts of a labor bill that is intended to revolutionize the country’s labor market and encourage foreign investors. The legislation, known as the Jobs Act, is expected to ease restrictions that make it difficult to dismiss employees, extend the duration of jobless benefits, and introduce a new type of contract that would offer compensation when a worker is dismissed. The Jobs Act is also intended to give rising levels of labor protection to people hired on open-ended permanent contracts. The Italian Prime Minister Matteo Renzi says that the labor law will encourage firms to hire new staff and help combat unemployment.

Employment in Italy

Employment in Italy

Belgium

According to the Hays Global Skills Index, the lack of flexibility in the Belgian labor market and education system indicates that the country’s economy is in danger of stagnation. The report states that Belgium has a serious problem in maintaining high-skilled jobs and talent in the country, which leads to a brain drain.

According to Wilfrid de Brouwer, the Managing Director of Hays Belgium, the Belgian government took preventative cost measures to protect the Belgian GDP and labor market during the recession, which has left the country’s revival weaker compared to other European countries.

“These preventive decisions made the unemployment rate much lower compared to the European average but resulted in a smaller candidate pool, which is only partially covered by the hiring of young foreign potentials.” ~Wilfrid de Brouwer, Managing Director of Hays Belgium

Employment in Belgium

Employment in Belgium

“In November 2014, 5.101 million young persons (under 25) were unemployed in the EU28 of whom 3.409 million were in the euro area. Compared with November 2013, youth unemployment decreased by 354,000 in the EU28 and 58,00 in the euro area. In November 2014, the youth unemployment rate was 21.9% in the EU28 and 23.7% in the euro area.” ~Eurostat

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