Home > unemployment > Euro area unemployment rate at 11.1% and EU at 9.6% in June 2015

Euro area unemployment rate at 11.1% and EU at 9.6% in June 2015

  1. July 31, 2015 at 1:13 pm

    Why are we still measuring the success of our economies based on indicators from outdated models? The system that we all knew and loved no longer exists. There is no going back now. All the data in the world will not help us correct this problem until we realize that we are dealing with a completely new reality. Unemployment will only get higher over time as deflation settles in in a rather permanent way. http://forwardeconomics.net/2015/07/26/liquid-society/
    I am not the only one arguing about the importance of fundamental changes that have happened. Many agree (McKinsey Research, Ian Goldin, I. Wallenstein) that much has changed, but they have quite not put the evidence together to make the conclusion ‘official.’

  2. August 1, 2015 at 2:01 pm

    Back at Keynes’s problem
    Comment on mschlotzhauer on ‘Euro area unemployment rate at 11.1% and EU at 9.6% in June 2015’

    “Important revolutions have occurred before our time, and since the days of Heraclitus change has been discovered over and over again.” (Popper, 1960, p. 160)

    Mschlotzhauer is a case in point and, of course, McKinsey et al. which traditionally earn their bread and butter by telling firms that they have to change and that they need change agents and that McK et al. will help for a modest fee.

    Change, of course, is a weasel word because there are two types: change for the better and change for the worse. With undifferentiated change-talk the representative economic consultant tries to make individual deterioration and degradation acceptable.

    An unemployment rate of 11% can only be interpreted as (i) a failure of the market system, and (ii), a failure of economics. To recall, economic theory once claimed that the price mechanism sees to it that all factors are fully employed. This claim/promise was implicitly dropped with the concept of natural unemployment which was located around 5%. Now, mschlotzhauer tells people that the good times of natural unemployment are gone: ‘The system that we all knew and loved no longer exists.’ Worse: ‘Unemployment will only get higher over time as deflation settles in in a rather permanent way.’

    Right between the eyes: Sorry folks, the market system does not work as advertized and the worst is still before you. Not surprisingly, like all consultants at all times, mschlotzhauer tells people to accept deterioration and to reinterpret it as chance.

    “The other option is to accept that we are headed towards a completely new direction, and become active participants in shaping the next wave of social and technological disruptions. When the winds of change blow, some build walls while others build windmills. Make your choice wisely!”
    http://forwardeconomics.net/2015/07/26/liquid-society/

    Let us put mschlotzhauer and the other windmakers aside. What an unemployment rate of 11% tells everybody is that we are back at Keynes’s problem of the 30s. For a thinking economist this means that there must be something deeply wrong with employment theory.

    The core of the employment problem is that the price mechanism does not work as standard economics hallucinated from Smith to Hayek and this has nothing to do with wage or price stickiness but with the fact that economists are scientifically incompetent.

    Change, indeed, is urgently needed. Yet, change in the proper sense means to leave the false orthodox employment theory behind and to advance to the correct heterodox employment theory (2015a; 2015b).

    Full employment is possible, acceptance of secular stagnation is premature. Actually, economists are the greatest hazard to the economy.

    Egmont Kakarot-Handtke
    References
    Kakarot-Handtke, E. (2015a). Essentials of Constructive Heterodoxy: Employment. SSRN Working Paper Series, 2576867: 1–11. URL
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2576867
    Kakarot-Handtke, E. (2015b). Major Defects of the Market Economy. SSRN Working Paper Series, 2624350: 1–40. URL
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2624350
    Popper, K. R. (1960). The Poverty of Historicism. London, Henley: Routledge and Kegan Paul.

  3. August 3, 2015 at 1:52 pm

    ICYMI

    The correct employment theory states that the average wage rate must rise in order to prevent unemployment and deflation. For more details see
    http://axecorg.blogspot.de/2015/07/how-to-save-greece-and-europe-at-same.html

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