Unemployment, poverty, hunger & homelessness all on the increase in Europe !

More than 26 million men and women unemployed across Europe, more than a quarter of the workforce jobless in Spain and Greece. Youth unemployment rates around twice as high.

In Spain almost 240,000 people lost their jobs in the first three months of the year, according to the national statistics office.

Unemployment in the Eurozone as surged to a fresh record high, while inflation has fallen to a three-year low, in a desperate bid the European Central Bank look set will cut interest rates.

The unemployment rate in Greece is the highest among European Union countries, according to data released by Eurostat today, which showed that joblessness in the eurozone had reached record levels. The number of unemployed Spaniards has risen beyond 6m for the first time since records began.  In France unemployment has set a new record, rising for the 23rd month to 3.2m in March, surpassing a previous peak in 1997. The total including all those seeking full-time work rose to 4.7m.

The Eurostat figures pointed to 27.2 percent for Greece and 26.7% for Spain workforce being unemployed.

Youth employment, defined as those under 25, hit 3.6 million in the eurozone. In Greece, 59.1% of under-25s were unemployed as of the end of January, while in Spain, 55.9% were unemployed.

Many countries have seen unemployment rise as austerity measures fail & following the financial crisis have led to cuts in government spending, which has involved public sector job losses.

The Eurostat data released related to figures recorded in March 2013 with regard to European Union - EU and eurozone countries, whereas in the case of Greece the figures related to January 2013.

Last week in Spain it was announced that unemployment had reached a record high - more than six million. The government forecast that the economy would shrink another 1.3% this year - worse than expected.

There are 1.9 out of 17m Spanish households in which no-one has a job, according to the latest unemployment figures. They receive state benefits of 426 euros (£358) a month and rely on food handouts from the International Committee of the Red Cross.  

In the eurozone area the unemployment rate reached 12.1 percent in March, compared to 12 percent in February and 11 percent a year earlier, while in the European Union, comprised of 27 countries, the rate remained unaltered from February at 10.9 percent.

The highest unemployment rates in the European Union were recorded in Greece (27.2 percent in January 2013), followed by Spain (26.7 percent) and Portugal (17.5 percent).

The lowest rates were recorded in Austria (4.7 percent), Germany (5.4 percent), Luxembourg (5.7 percent) and The Netherlands (6.4 percent).

According to the data released, Greece’s unemployment rate rose from 25.7 percent in December 2012 to 27.2 percent in January 2013. The January 2013 figures represented 23.9 percent of the male workforce and 31.4 percent of the female workforce.

You could be forgiven for thinking that it couldn’t possibly be much worse – but you would be wrong.

A useful Eurostat overview (here), based on the 2012 results of the European Labour Force Survey shows, in addition, a worrying degree of and rising trend towards underemployment and hidden unemployment.

Let’s start with the standard international definitions used by Eurostat according to which the unemployed are all those without work but actively seeking it and available for work in the short term. The unemployment rate is this number divided by the sum of the unemployed and the employed. There are other categories, though, that can sensibly added to this figure.

First of all there are the part-time workers who actually want, and would be able to work, longer hours. In fact more than a quarter (21.4%) of the 43 million part-timers in Europe want longer hours. That percentage is up from 18.5% in 2008.

It is also worth noting that in Germany, widely seen as having a robust labour market and, according to some, even suffering from labour shortages, there are 1.8 million workers in this category.

An additional 8.2 million are available for work but at the time of the survey are not actively seeking. These are known informally as “discouraged workers” who are assumed to recommence job search once labour market prospects pick up. Then there is another, smaller category of people who, conversely, are seeking work but are not immediately available (for example because they have a job offer that starts in the near future).

There are 2.3 million in this group, meaning that more than 11 million people are not in the unemployment statistics – they are considered to be “economically inactive” or out of the labour force – but can reasonably be counted in a broader measure of underemployment.

This is up from 9.7 million in 2008. Adding these two groups together, Eurostat calculates that there is an additional unused labour supply of 4.6% in the EU27 and 4.9% in the euro area. In Italy, where unemployment is already extremely high, these two groups represent almost three million people and more than 12% of the labour force.

Using these figures we can make a rough and ready calculation of the “real” rate of underemployment in Europe.

According to the European Labour Force Survey, average hours of part-timers are just under twenty per week, whereas full-timers work 41.5 hours a week.

It's guess work on how the working time preferences are distributed, but a reasonable starting point would seem to be to assume that those part-timers wanting longer hours have the same average hours as all part-timers and that they want to move to the average of full-timers. In other words we add somewhat more than half of the 9.2 million involuntarily part-time workers to the unemployed total.

We then add the people in the two sub-groups of the economically inactive both to the numerator (unemployed) and denominator (unemployed plus employed).

In summing up - the unemployment rate captures only about two-thirds of the extent of European underemployment. Or the unemployment problem is perhaps half as bad again as you already thought.

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Respect For the Unemployed & Benefit Claimants
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copy to: EAPN - European Anti Poverty Network CGT European Trade Union Confederation (ETUC) CGTP