The Wall Street Journal reports,
The employment rate of Italians under 40 fell nine percentage points since 2007, while it rose the same amount for those between 55 and 64 years, according to Eurostat.
The article points to high fixed costs of hiring works, which holds down employment of young people and leaves them only with short-term, temporary jobs. Read the whole thing. One more excerpt:
Employers in many countries are reluctant to hire on permanent contracts because of rigid labor rules and sky-high payroll taxes that go to funding the huge pension bill of their parents.
Don’t think it couldn’t happen here.
If the right discussions don’t happen it will happen here. I grew up in Greece, and watched a whole country go socialist in the 70s. They literally talked themselves into it over a period of a few years.
Unfortunately recent events haven’t taught anybody a lesson there. I have no reason to believe that we’re any smarter here.
Interesting, if you look at the data for this recovery-expansion the fastest US employment growth has been in such low wage industries as restaurants, retail and hospitality.
But these are the very employes where required social security, unemployment insurance and medicare payments are the largest share of total employee compensation.
Just the opposite of what the WSJ implies for the US.
It’s because those are exactly the industries that are more sensitive to shifts in consumer spending and confidence. They are more volatile in general and also took the biggest hits on the way down. These are short term boom and bust effects of a particular business cycle. The question is about the long term employment trends in the disappointing new normal. Youth employment is disastrously high in much of Europe where pension costs are highest and job protections are strongest.