Magazine article Foreign Policy

Just How Bad Is It?

Magazine article Foreign Policy

Just How Bad Is It?

Article excerpt

If there has been one defining feature of the Great Recession, it's jobs--the persistent lack of them, that is. The world has had economic downturns as steep and long as this one before, but never in modern times has employment taken so long to recover. And there's no sign that we're through the thick of it yet; most economists project that U.S. jobs won't come back fully until 2017 or even later. How bad is it? Worldwide, tens of millions of people can't find work. But the United States has taken a particularly bad hit. Depending on how you count, anywhere from 9.5 percent to 16.5 percent of the U.S. workforce was unemployed in July. That's far above most of Europe, where struggles with unemployment have been limited by a strong social safety net. The Netherlands, for example, has managed to get through the downturn with an unemployment rate less than half the U.S. rate, and other countries are holding steady or making small gains. Other big losers include young people and men; both groups are suffering more than they have in previous downturns. This is the worst year on record to be under age 24 and looking for a job.

Perhaps the most alarming aspect of the crisis is that no one seems to know how to fix it. Insurance can serve as a stopgap; employers can be encouraged not to lay people off. Industries can be propped up, and public-works posts can be created. But all that takes money, something there's little of these days. And as for homegrown jobs, well, they just aren't coming back like they used to.

[ILLUSTRATION OMITTED]

A WORLD WITHOUT JOBS

Unemployment may be the best barometer a country has about the state of its economy. During the financial crisis, the news has been bad--but not uniformly so. Wealthy countries have been the worst hit by the jobs crisis, while developing countries such as Brazil and Indonesia have fared better, thanks to their relative independence from Western markets as well as strong demand for agricultural products and natural resources.

[GRAPHIC OMITTED]

Selected countries unemployment rates during the crisis

                    2008   2009    2010

United States       5.8     9.3     9.6
The Netherlands     2.8     3.4     4.3
Greece              7.7     9.5    11.7

230% Amount by
which Iceland's
unemployment
rate rose between
2006 and 2010

Sources: "Global Employment Trends for Youth," International Labor
Organization, data [c] ILO Department of Statistics; U.S. Bureau
of Labor Statistics; all data used with permission. Special
thanks to Dean Baker of the Center for Economic and Policy Research.

Note: Table made from bar graph.

THE YOUNG AND THE JOBLESS

It has been a terrible year to be young and looking for a job: About 81 million people worldwide between the ages of 15 and 24 are currently without work. In the United States, the youth unemployment rate stands at 19.1 percent, the highest since tracking began in 1948. Young workers are three times more likely to be unemployed than adults, as they tend to be the last hired and the first fired. Nor do these new workers have the skills and experience that would make them indispensable in the workplace. At the moment, the global job market is expecting a large influx of young workers, meaning that some 470 million new positions are needed over the next 10 years just to maintain current unemployment rates.

Global youth unemployment (in millions)

2007       73
2008       74
2009       81
2010       81
2011       79

WORST HIT: Developed countries, where
unemployment among young people has
risen to a whooping 17. … 
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