ECONOMY

Eurozone unemployment falls but stays high in Greece’s case

The unemployment rate in the eurozone fell to 7.8 percent at the end of June from 8.6 percent a year ago, Eurostat announced yesterday. Greece is not included, because the latest figures it has made available date from December 2005, when its jobless rate stood at 9.6 percent. Despite Greece’s chronic inability to come up with up-to-date unemployment figures, the eurozone figure was a confirmation of the continuing improvement in economic activity and disproved market forecasts of stagnation. Among the 25 European Union members unemployment stands at 8.1 percent. The greatest unemployment rate is in Poland (16 percent), followed by Slovakia (15.1 percent) and Greece, according to the figure from December 2005. Just behind Greece are France (8.7 percent), Malta (8.5 percent) and Belgium (8.4 percent). On the other end of the scale, the lowest unemployment rates are found in the Netherlands (3.8 percent), Denmark (3.9 percent), Ireland (4.4 percent) and Luxembourg (4.7 percent). Poland also has the greatest unemployment rate among the young (those aged 15-24), with 32.3 percent, although it has fallen significantly from last year’s 38.1 percent. Following are Slovakia (29.7 percent) and Greece (26.4 percent, again based on December 2005 figures). The lowest figures are found in the Netherlands (5.8 percent), Ireland (8.1 percent) and Austria (9.6 percent). By comparison, unemployment in the US is 4.6 percent, rising to 10.4 percent for the young. Long-term joblessness Interestingly enough, the unemployed are divided into age groups ranging from 15-74 years old. The unemployed aged over 65 are, like their younger counterparts, actively seeking jobs and are ready to work within two weeks of an offer being made to them. A study by the Bank of Greece’s Economic Research Division shows that unemployment in Greece is an increasingly long-term phenomenon. In 2005, 55 percent of the registered unemployed (those actively seeking work) had been out of a job for more than a year. Others are seasonally unemployed. The study shows that women, older people, those without prior job experience and those living in regions with high unemployment are more likely to be among the long-term unemployed. Also, those with a higher level of education are less likely to face long-term unemployment. One way to combat long-term unemployment is through proactive employment policies that help people gain the skills more in demand in the market or retrain in order to acquire new sets of skills. On the other hand, certain features of the labor market that raise obstacles to quick adaptation in developments, such as technological progress and globalization, and delay the setting up of new enterprises probably contribute to long-term unemployment. These features include state interventions limiting competition in the goods and services markets and employers’ reluctance to hire due to non-wage labor costs and the difficulties they have in laying people off. Thus, the study concludes, a more flexible labor market may create more jobs and reduce long-term unemployment.