Man Without Qualities

Monday, May 30, 2005

Europe And The Hidden Jobless

The French rejection of the EU Constitution is just the latest symptom of a general and inexorably spreading economic anxiety throughout Europe. The Netherlands is now poised to reject that same document. The European system is seriously broken, and may be close to being beyond repair without huge social dislocation. That cannot be correctly said of the US, which has its own, much less severe issues. But while the European electorate and its elite all know (or have a panicky, suppressed suspicion) that the problems are much larger than is officially admitted, few are willing to embrace the necessary reform. In the mean time, the problems just keep getting worse, and the efforts to conceal and deny the extent of those problems themselves just keep growing. Here's another amazing example from the Wall Street Journal:

STOCKHOLM -- Jan Edling, a little-known labor-union economist, is suddenly in the policy spotlight with his assertion that Sweden's real jobless rate is really closer to 20% than the official 5.5% rate.

He resigned last week from the big LO blue-collar union where he worked after the association declined to publish his research project into Sweden's hidden joblessness. Instead, he posted it online.

"My suspicion is that we are putting people into other benefit categories that other countries would put into the unemployment column," Mr. Edling said.

That Sweden has far more people out of work than detailed in the official 5.5% unemployment rate isn't totally new. Beyond the official rate, an additional 4.4% of the working-age population are parked in the government's elaborate array of job-creation and training programs, according to a study by Skandinaviska Enskilda Banken AB with data from Statistics Sweden.

But Mr. Edling calculates that another 10% of working-age people can be identified as unemployed, using correlations between unemployment, long-term sickness and early retirement among Sweden's municipalities and regions. This makes the actual unemployment rate closer to 20% of the work force, he said.

Some are calling the French rejection of the EU Constitution a "disaster" - which, for some people in the European elite, it is. But my guess is that observers looking back from a few years in the future will see the French vote of May 29 as but a mere harbinger of what is to come. Like the first swallows at Capistrano.

Or, more suggestively, the first irate crows in "The Birds."

Comments: Post a Comment