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European Structural Unemployment

Here is a great graphic from the Wall Street Journal which identifies the structural unemployment, productivity levels and the unemployment rate. Structural unemployment refers to unemployment arising from changes in demand or technology which lead to an oversupply of labour with particular skills or in particular locations. Structural unemployment does not result from an overall deficiency of demand and therefore cannot be cured by reflation, but only by retraining or relocation of the affected work-force, some of which may find work at low wages in unskilled occupations. Structural unemployment is distinct from frictional unemployment, which is essentially a short-term phenomenon.

* Spain and Greece have been highlighted as economies with significant unemployment problems.
* Ireland although has high unemployment does have encouraging productivity levels compared to other EU countries
* Norway seems to have things right – low unemployment and high productivity
* Eastern bloc countries tend to have lower productivity levels.

Structural Unemp Euro

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  1. August 7, 2014 at 10:31 pm

    What a lot of rot. “Structural Unemployment” sounds like something made up by someone with a mean streak in order to sound clever. European unemployment is fully explained by countries being locked into a common currency that can’t allow adjustment between different levels of economic competitiveness. The euro is structurally wrong for Europe. Its too cheap for Germany and too expensive for Spain. Hence unemployed young Spaniards must either move to Germany or out of the Euro region all together. There is nothing structural about unemployment. It results from bad economic management for which there should be no excuses. Mean people make up unpleasant terms to explain things they don’t understand.

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