The unemployment rate in the Eurozone hit another record high in May, up to 12.1 percent from 12 percent in April. The rate is twice as high for young people across the region, with nearly one in four young Europeans unable to find work — and almost three in five young Spaniards and Greeks jobless.
The prolonged crisis in youth unemployment threatens to drag on European growth for decades, as it keeps the next generation of economic drivers under-skilled, under-experienced, and financially insecure. The Economist has a chart of the unemployment rate for 15- to 24-year-olds in the various countries that make up the European Union:
Several of the names atop that chart will be familiar to austerity watchers: Greece, Spain, Italy, Cyprus, and Portugal have faced some of the stiffest cuts during Europe’s multi-year effort to slash its way back to growth. As the failures of that approach become ever more apparent, and its proponents acknowledge austerity has done more harm than they predicted, there are signs of a change in course.
But on this side of the Atlantic, U.S. lawmakers are actually outdoing the countries that use the euro as their currency. Those 17 nations have reduced their combined 2013 deficits by nearly 55 percent compared to 2009, primarily through cuts. America’s deficit pullback over the same period has been even steeper — over 60 percent according to the Congressional Budget Office.
This marks a role reversal from four years ago, when the U.S. chose stimulus over austerity and saw a far stronger and faster initial recovery than Europe did. Today’s American austerity is both pushing economic growth down and keeping unemployment up.
Economists expect things to get worse before they get better. Even if Europe’s longest-ever recession doesn’t carry into a seventh straight quarter, unemployment is likely to continue rising for a time even after a nominal return to growth.