Unhealthy developments across the euro area labour market
There are many ways to define rebalancing within the euro area: relative prices, trade, productivity, unit labor costs, etc. I’d argue that one could see it in the employment data as well, although it will take a long time to work its way through. Basically, Spaniards should move to Germany and vice versa to enjoy higher income and lower input costs, respectively, when looking for work or planning a business. Well, a lucky 5,000 young Spaniards will get the chance for apprenticeship in Germany thanks to a recent deal between Germany and Spain. But with 770,100 Spaniards aged 15-24 unemployed in Spain, 5,000 German jobs is not going to go very far. So what’s happened to date?
Eurostat released its annual detailed report of the labour force in Europe. I dug around a bit and found some interesting stats. The gist of what I found is the following: employment in the periphery markets has plummeted with no seeming end in site. Notably, 2012 employment levels in Portugal and Greece are 299,000 and 356,000 lower than their respective 2000 levels.
Note: Please click on all charts for a closer look.