For the same group of countries as yesterday, here is the unemployment rate since 2000.
You can see that the PIIGS countries all range from bad to terrible. Both Spain and Ireland look dreadful with unemployment very high and still no clear sign of even stabilizing, let alone recovering. Greek unemployment is increasing rapidly, and both Italy and Portugal, although not as high, look like they could still go higher.
By contrast, French unemployment clearly appears to have stabilized, and German unemployment is low and falling.
I imagine there will be major political shifts in countries with unemployment this high.
You have to keep in mind the underground economy, which in Italy and Greece is huge, up to a third of GDP.
ReplyDeleteSome places in Southern Italy have official unemployment rates of up to 40%, but most of the local people actually work in the black market. Tax evasion in Italy is €200 billion if I recall correctly. That's why despite such an harsh crisis and non-existent recovery, there is much less political backlash than in the United States. A large part of people's real income is not reflected in the official statistics. There is a much higher level of resiliency in the system.
3 years ago the NYT said that tax evasion in Italy was 27% of nearly 2 trillion, or ca. 540 billion. From the people that brought you a porn star in parliament.
ReplyDeleteYou are definitely right that there will be major shifts in countries but I am not so sure it will be limited to the countries with unemployment. Those unemployed will become a problem for countries that are not suffering in one fashion or another.
ReplyDeleteI'm more curious about how/why Spain's unemployment rate could go from 8% to 20%, but based on the previous post, their GDP declined only about 2% over the same period. By contrast, Ireland's unemployment went from 4% to 14% and their GDP fell 20%. Both had about 10% of their workforce lose their jobs, but the apparent impact on GDP was drastically different.
ReplyDeleteSpain's unemployed are low-productivity workers and Ireland's are high-productivity?
Ireland's GDP is disproportionately made up of foreign corporate profits seeking favorable tax treatment?
Per one of the previous comments, large parts of Spain's economy is "off the books"?