Broad unemployment across Europe, 2010 and 2011 (2 charts)
from Merijn Knibbe
In November, Eurostat published a new statistic which, for the first time, enabled the calculation of ‘U-6′ unemployment in Europe (2010), a metric which not only includes unemployed people seeking work and (almost) directly available for work but also people who are not directly available as well as people who are available but do not seek and people with a part-time job who want to work more. Barely five months later they published the 2011 data. Eurostat does, for whatever reason, not use the data to calculate U-6, unlike the Bureau of Labor Statistics in the USA, so somebody else had to do it (graph 1 and 2). What does is show?
1. The elephant in the room: there is a large and deep crisis, the EU and the Euro did not live up to their promise. Also, the Netherlands had almost the lowest unemployment of the entire EU – but its labor market was far from heated, let alone overheated. There is not even a shimmer of wage inflation in sight, in the Netherlands, let alone in the other countries. Forget about those debts, for the moment – the Eurozone government deficit is half the size of the UK/USA/ Japan one – and these countries do manage. Let’s introduce Eurobonds and move on, solving more important problems.
2. When we look at levels it shows that in a number of countries (most notably Italy, but also the Baltics and Bulgaria) U-6 unemployment is relatively higher, compared with other countries, than U-3 unemployment as many people are available for work but do not seek.
3. Looking at changes we see that:
a. The German decline becomes even more pronounced
b. The Danish increase becomes even more pronounced. Of all the countries around Germany, France, Belgium, the Netherlands, Denmark, Poland, the Czech Republic (and not in the graph, but Switzerland can be added to this list) Denmark had clearly the largest increase in unemployment when we look at U-6. So much for Danish ‘flexicurity’.
c. The Portuguese increase becomes much, much larger.
d. The Baltics show large declines of unemployment, which are not caused by a shift from ‘U-3′ unemployment to ‘U-6′.
e. The increase in Greece stays very large
f. U-6 in austerity poster child Ireland increases quite a bit faster than U-3.