Eurozone at Risk of Losing Additional 4.5 Million Jobs

Human Wrongs Watch

If current economic policies do not change quickly, the Eurozone may lose 4.5 million jobs over the next four years, the United Nations warned in a new report, adding that this would increase the risk of social unrest and would further erode citizen’s confidence in their governments, the financial system and European institutions.

Young people have protested around the world for more jobs and equality. Photo: ILO

Produced by the International Labour Organization (ILO), the report – Eurozone job crisis: Trends and policy responses– stresses that there is “mounting evidence” that a prolonged labour market recession may be in the making, with labour markets in Europe not having yet recovered from the global crisis that hit the world economy in late 2008.

“Without a prompt policy turn – to address the crisis and to regain the trust and support of workers and enterprises – it will be difficult to implement the reforms necessary to put the Eurozone back onto a path of stability and growth,” the report states.

17.4 Million People Looking for Jobs in Eurozone

The report notes that total employment in the Eurozone remains 3.5 million lower than before the crisis, and that employment has actually fallen since the start of the year in half of the zone’s countries, resulting in a total of 17.4 million people looking for jobs in the region, the UN reports.

Young people are particularly at risk, with the current youth unemployment rate at 22 per cent in the Eurozone, especially in southern countries such as Italy, Portugal, Greece and Spain, with these last two having a youth unemployment rate exceeding 50 per cent.

Fiscal Austerity Measures Detrimental to Employment

The publication points to fiscal austerity measures as being detrimental to employment. “In a depressed macroeconomic context, these reforms are likely to lead to increased numbers of layoffs without any boost to job creation at least until economic recovery gathers momentum,” it states.

The report adds that by embracing a Eurozone growth strategy with jobs at its core, a recovery is still possible within a single-currency setting – however, to do this, austerity approaches need to be abandoned and countries must urgently reform their financial systems.

On 30 May this year, nearly 5,000 delegates kicked off a United Nations forum in Geneva focusing on the global jobs crisis and its impact on youth, as well as social protection and rights at work.

30 Million Added to Unemployment since 2008

The 101st International Labour Conference came at a time when around 30 million people have been added to the unemployed since the 2008 financial crisis, and nearly 40 million more have stopped looking for employment, according to the ILO.

“We know that it’s time for a policy rethink,” ILO’s Director-General, Juan Somavia, said that some 45-50 million new jobs are needed each year, over the next five years, just to get back to the pre-crisis job situation.

Youth Jobless Rates Nearly Three Times that of Adults

Somavia highlighted, in particular, the impact of the crisis on the world’s young people, noting that “we have been failing our young women and men for some time now.”

“Generally, youth jobless rates are nearly three times that of adults. This is without the many millions worldwide who have become discouraged and stopped looking for work. Furthermore, those who do get a job are likely to be working part time, on temporary contracts, in the informal economy, or precarious work,” he said.

“There is little intergenerational solidarity when the adult generation who formulates policy, lets the young generation carry a heavy share of the burden of the crises.”

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