Unemployment – a long run
The elephant in the room: in a historical perspective, unemployment in the Eurozone is still very elevated, not only in Spain and Greece, but also in France and even Germany. I’ve updated and completed my long-term unemployment series with 2013 and 2014 data (Eurostat) as well as 1948-1983 data for France and the UK (UK: Bank of England, I increased the BoE data a little as the BoE data are systematically lower than the Eurostat data. France: guesstimate as the source shows unemployment as a % of the total population, not as a % of the labour force). This shows that the high rate of unemployment in Germany around 1950 was quite exceptional. But, remarkably, the inflow of 10.000.000+ refugees in Western Germany in the 1945-1950 period did not prevent (enabled?!) this country to experience a ‘Wirtschaftswunder’, an economic miracle, and unemployment quickly fell to (at that time) normal levels, despite the enormous amount of social and economic dislocation after the war and (this is the classic movie about this period). After reunification in 1991 Germany was not able to repeat this miracle and the unemployment rate went up to levels which were even higher than in 1950, equal to the highest rates ever reached in France and the UK. At this moment the vacancy rate is up and, tellingly, the highest regional rate of unemployment is in Bremen (West-Germany) and not in East Germany anymore. After 1945, Germany however experienced a severe baby bust and a baby boom only started in about 1949. As the rate of job creation seems to slow down (and has been about zero in East Germany during the last ten years), the upward trend of the vacancy rate may well be caused by this baby boom generation going into retirement.