The labor market, the most important one in economic terms as far as I am concerned. We used to have the idea that the European labor market is much more distorted than the American one, the latter supposedly more “free”. Despite today’s so-called good news on the US – admittedly, it’s not so bad – the numbers don’t tell the whole story. U6 – the US unemployment rate which takes voluntary leavers and half-time employed willing to work full time into account – still roughly shows a 16% unemployment rate. So it seems that in the US, also structural problems (hysteresis) are at work.
But I would like to focus just for a second on the following graph. It depicts the youth unemployment in various European countries :
These are staggering numbers and hiding big dramas. We knew the situation was dire in Ireland with the usual mass outflow of young potential (US,Canada, Australia here we come !) and we shouldn’t be surprised that Greece and Portugal have climbed in the charts as well. But just have a look at Spain : 1 out of 2 younger job seekers ends up with no job. And that’s the real drama : in a time of deleveraging and paying of historical debt, the younger generation in certain corners of the world is in fact a beaten generation.