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European Debt Crisis

European job market struggles more than U.S.

Stephen Beard Jan 6, 2012

Steve Chiotakis: In about an hour and a half, we’ll get the first really important economic data of 2012 — the Labor Department’s monthly jobs report. Economists are optimistic the unemployment rate may continue to drop. Well in parts of Europe, the job market is in even worse shape.

From the European Desk in London, Marketplace’s Stephen Beard reports.

Stephen Beard: This is a tale of two Europe’s — north and south. Germany, in the north, is booming; unemployment there is at a 20-year low, 6.8 percent, and falling. Austria, the Netherlands and Luxembourg have also seen a relatively healthy labor market.

But it’s a different story in the south. There, unemployment is rising fast — in Italy, Spain, Portugal and Greece.

Here’s Gerwyn Davies of the Chartered Institute for Personnel Development.

Gerwyn Davies: It’s to do with the amount of debt that the likes of Greece and Spain have to pay, and the higher borrowing rates that they face as a result of that debt.

High borrowing rates means slower growth. Davies says these southern, debt-laden eurozone countries are also suffering because their labor markets are too rigid — and none more rigid than Spain. Its unemployment rate is now 23 percent.

In London, I’m Stephen Beard for Marketplace.

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