European labour market

Ten million more unemployed in Europe than in 2008

Austerity measures have not addressed the root causes of the crisis nor have they brought down unemployment, according to a snapshot of EU countries based on an upcoming ILO report on the state of global labour markets.

News | 08 April 2013
GENEVA (ILO News) – There are over 10 million more jobless people in Europe now than at the start of the crisis, according to a snapshot of the European labour market released by the International Labour Organization (ILO).

“While fiscal and competitiveness goals are important, it is crucial not to tackle them through austerity measures and structural reforms that do not address the root causes of the crisis,” says the ILO in a snapshot of the EU labour market launched ahead of its 9th European Regional Meeting that opens in Oslo on Monday. “Instead, moving to a job-centred strategy could serve both macroeconomic and employment goals.”

The employment situation has continued to deteriorate since the introduction of fiscal consolidation policies. Following a pause in 2010-2011, unemployment has kept growing and shows no signs of improvement. Over the past 6 months alone, one million people have lost their jobs in the EU.

The are now more than 26 million Europeans without a job, with young and low-skilled workers being the hardest hit.

Austerity a threat to prosperity?

Unemployment in Europe has reached historic levels and there is growing concern that the jobs crisis is so deep it will have a profound impact on the region's ability to recover.

Only 5 EU countries out of 27 (Austria, Germany, Hungary, Luxemburg and Malta) have witnessed employment rates above pre-crisis levels. Countries like Cyprus, Greece, Portugal and Spain have seen their employment rate drop by more than 3 percentage points in the last two years alone.

Long-term unemployment is becoming a structural problem for many European countries. In 19 of them, more than 40 per cent of the unemployed are now long-term unemployed, meaning that they have been out of a job for twelve months or longer.

The worsening employment situation also means that the risk of social unrest is now 12 percentage points higher than before the start of the crisis.

Policies to address the crisis

The current employment scenario callls for the adoption of a series of policies.

First, addressing the structural issues that lie behind the crisis, notably in the financial sector, which were at the epicentre of the crisis but have not yet been resolved. The result is that small and medium-sized companies do not have adequate access to bank credit, which is crucial to produce and create jobs.

Second, confronting the downward pressures on wages and employment that are damaging productive investment and intra-EU trade. The successful experience of Sweden’s response to its financial crisis in the 1990s shows that such an approach is both effective and feasible.

Third, adopting emergency measures such as employment guarantee schemes for young people. These are programmes designed to help young people get a job, education or training.

Fourth, using social dialogue between employers, workers and governments as a key tool for designing policies, gathering support for pro-employment reforms and ensuring that such reforms focus on what people really need.

The ILO’s 9th European Regional Meeting (which will be webstreamed) will bring together government, worker and employer representatives from 51 European and Central Asian member States to discuss the way forward for the region in the context of the continuing financial, economic and social crisis.