The Eurozone’s youth unemployment rate is eye-watering. Figures out Tuesday put the rate at 23.3% this August.
The figure has not even dropped by a percentage point since its peak in February last year. That’s a nightmare for the Eurozone’s governments, and the future of their economies.
Youth unemployment in some countries is still of the charts (they literally would not fit on the chart below). Greek unemployment for people aged under 25 is still at 51.5%, it’s now second to Spain, which comes in at 53.7%.
But the bloc is hugely divided. Germany and Austria have youth unemployment rates of just 7.6% and 8.2%, respectively.
The long-term effects of youth unemployment are brutal. A recent post from the Brookings Institute outlines just some of the “scarring” effects of youth unemployment.
“Today’s labour market failures have long-term consequences for unemployed youth. A growing academic literature on the ‘scarring’ effects of launching a career without a job suggests that young people who endure early spells of unemployment are likely to have lower wages and greater odds of future unemployment than those who don’t. Studies indicate a 10 to 15 per cent wage ‘scar’ from early unemployment, and those earnings losses persist for at least 20 years. These findings hold for individuals with a college degree, and the prognosis for individuals without a college degree is grimmer still.”
It’s hard to see the hope for the Eurozone here. The incredibly weak growth the bloc is seeing at the moment is just not enough to significantly reduce youth unemployment, and this is a comparatively good period for the area — better than the preceding years of crisis and recession, at least.