The Shadow of Unemployment

Posted on: 17.04.2010    13:34:50

In some candidate countries such as Poland and Slovakia, one-fifth of the labor force is out of work. Long-term unemployment is a serious problem, with two-thirds of all unemployed having been out of work for more than a year in some countries. Young people and unskilled workers suffer disproportionately. More than one-quarter of young people are looking for jobs in the CEE countries, compared with an average of 16 percent in the EU. Again Poland and Slovakia are particularly badly affected, with 35 to 40 percent of all those under 25 years old out of work.

Millions of jobs were lost in the early 1990s, when output collapsed after the onset of economic transition. However, faced with bleak re-employment prospects, many laid-off workers did not join the unemployment queues, but left the labor force altogether. Older workers took early retirement, women stayed at home, and others moved into the shadow economy. As a result the participation rate—the share of working-age people that either have a job or are actively seeking one—fell in all the countries. Had that not been the case, Poland’s unemployment rate might now be more than 25 percent and Hungary’s could be approaching 15 percent.

While economic growth picked up almost everywhere in the second half of the decade, employment remained stagnant, or even continued to fall. In Hungary, Poland, and Slovakia only 55 to 56 percent of the working-age population is employed. The real difference between the EU’s and the CEE countries’ labor markets is therefore not unemployment rates, but employment trends. The average employment rate (the number of employed as a share of the working-age population) in the EU stands at 65 percent, still well below the 72 percent in the United States, but at least the rate is rising steadily.

For hundreds of years, educated Eastern Europeans, have migrated in the search for Employment, fist to the USA but since 2005 to Western Europe , particularly the UK, Ireland and the Netherlands and latterly Germany but this route is under severe economic and political pressure owing to unemployment problems within the European Union but does explain why the demand to come to the UK has not fallen despite the depreciation of sterling.

Author – Chris Slay

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