November 24, 2024

Youth Unemployment In Europe Reaches Catastrophic Levels

The downward economic spiral in Europe continues to accelerate with no solutions in sight.  Greece and Spain, two of the most crippled economies in the Eurozone, have now achieved the infamous distinction of 50% plus rates of youth unemployment as shown in the following graph from The Atlantic.

youth-unemployment

Here’s what the graph does tell us: Young workers in Greece and Spain are facing an absolutely egregious work drought, where half of high-school and college-graduates ready to find a job aren’t finding one. And 55% isn’t the ceiling. Both economies are shrinking and unemployment is a lagging indicator — as Americans have learned, the rate can keep going up after an economy technically starts growing. This economic tragedy can easily become a social disaster as young promising people either leave their country to work somewhere else or else turn to illegal or violent activities to protest policies wrecking their economies or lash out against a country that’s leaving them behind.
The nations of Europe represent the largest economy in the world.  While the U.S. has so far avoided the nightmarish unemployment seen in Europe, how long can the U.S. remain decoupled from the economic trauma spreading across Europe?  Many major U.S. international companies do a significant amount of business in Europe.  Weak demand for U.S. products in Europe will sooner or later translate into lower production and layoffs by international firms in the United States.  A weakened U.S. economy would in turn dampen demand from the U.S. for European goods and services, perpetuating the cycle of layoffs and weak economies in both continents.

While the youth unemployment numbers in the U.S. compare well to Europe, the prospects for first time job seekers has been dismal, especially for recent college graduates.  After spending four expensive years in college, almost half of current graduates are taking jobs that require no college education.  I saw this first hand this week when I had lunch with a friend at an Irish Pub in Norwalk, CT.  I had the impression that the waitress who was waiting on our table was college educated, so I asked her when she had graduated.  She told me that she had graduated in May of this year but was unable to find a job in her field of study.  Things may be horrendous for the youth of Europe, but it seems that we are slowly but surely catching up to them.

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