September 20, 2006


Caption: Un- and under-employed chickens often loiter and get into trouble.

It has become a common pastime in the U.S. to bash the social protections of European economies as inefficient and prone to high rates of unemployment.

(It is seldom observed that, thanks to those social protections, being unemployed in Europe is vastly different than being unemployed in the U.S. For starters, think health care...)

But the old image of European slackers doesn't work so well any more. As mentioned in previous Goat Rope posts, several European countries with strong safety nets and more protections for workers have higher rates of productivity and upward social mobility than this country.

And a new study from the Center for Economic and Policy Research finds that

Europe's welfare states have steadily narrowed their traditional employment gap with respect to the United States... The employment gap between the United States and Europe has shrunk considerably since 2000, falling to 1.1 percentage points in 2005 for prime-age workers.

A large part of the remaining difference is attributed to the low employment rates of women in Spain and Italy.

Some of the best performers were countries with strong social protections. The Netherlands, Denmark, and Sweden all had higher prime age (25 to 54) employment rates than the U.S. (81.5%, 83.9%, 87.8%, and 79.3% respectively).

The take-home message seems to be that there is more than one way to get by in a global economy and success doesn't have to come at the price of stagnant wages, persistent poverty and doing without health care.

To view the full report, click here.


1 comment:

Anonymous said...

Very good post. I doubt that no one in the United States knows the actual unemployment rate. As you probably know, many people are not included in the count which helps politicians and those who want to believe in the myth of American superiority in all things business. It wouldn't surprise me that European countries are more honest in their count than we are. Note also, those countries you mentioned as being particularly social conscious and have low unemployment, all have very high standards of education available to everyone. Our education system is a disgrace. It's one of those things that is pretty well known but no one wants to do anything meaningful to improve. I lived in Europe for 4.5 years and it seemed to me Europeans have a much higher quality of life than we have here. Thanks for keeping an eye on so many interesting issues.