Why Global Unemployment Is Rising

By Lewis Humphries | May 15, 2012 AAA
Why Global Unemployment Is Rising

Since the global recession of 2008, unemployment has remained a significant issue for many countries. According to the International Labor Organization (ILO), unemployment has risen in two-thirds of European countries since 2010, while the stuttering economic recovery in advanced economies such as the U.S. and Japan has continued to have a significant impact on global unemployment and underemployment rates. The ILO study also found that in comparison to unemployment figures recorded before 2008, there are now 50 million fewer jobs available in the global economy, and this situation is unlikely to improve in the face of continued austerity, political change and economic uncertainty.

Greece: Suffering from Five Years of Recession
Greece is now entering its fifth year of recession and is at the heart of a prolonged eurozone crisis that has already afflicted a number of central European nations. Growing political turmoil and the absence of a recognized government is undermining the nation's economy and financial stability. The country is also suffering from a soaring unemployment rate. In fact, data released by the country's statistics service ELSTAT reveals that Greece experienced a record high level of unemployment during February of this year, with 21.7% of citizens reported as being out of work.

Not only have these economic and political issues left more than 1 million individuals unemployed in Greece, but they have also had a highly detrimental effect on the prospects for young job seekers aged between 15 and 24. Within this social demographic, the employment rate stands at a staggering 53.8%, which is 13.5% higher than the figure from the previous year. In total, the nation is reported to have lost more than 500,000 jobs between 2008 and 2012, and it appears to lack a stable foundation from which to launch a sustained and much needed recovery.

Zimbabwe: Adapting to Significant Political Change
Zimbabwe has undergone significant change during the last four years, thanks largely to the formation of an inclusive government in 2008. As the nation has struggled to manage the subsequent transition and been unable to cultivate a strong financial sector, it has faced several challenges that have caused the unemployment rate to remain uncomfortably high. The International Monetary Fund has identified these obstacles as part of the recent "Change Readiness Index 2012" report, which evaluates nations and their ability to manage change and create opportunities for growth.

Zimbabwe's weak business climate and high poverty rate have created an unstable economy and a paucity of employment opportunities - an estimated 80% of citizens are unable to secure job opportunities or long-term placements. This figure rises to 92% when underemployment is included, which remains unusually high, even when compared with neighboring African nations that face similar social and economic challenges.

Tunisia: Feeling the Effects of Revolution
It is clear that political change and instability has a major impact on a nation's rate of unemployment, especially in circumstances where citizens have a desire to embrace a better standard of living and less oppressive government rule. This was the case in Tunisia during 2011, where economic hardship encouraged a revolution and the eventual removal of President Ben Ali. However, rather than improving their situation, the people of Tunisia are now experiencing a worsening socio-economic climate, marked by a recession after a decade of sustained growth.

It comes as no surprise that Tunisia's unemployment rate soared in 2011, peaking at 18% during the last financial quarter. This is an increase of 5% from 2010, and alongside rising inflation, has diminished the average citizen's purchasing power and overall level of consumer confidence. The unemployment rate is even higher among young university graduates, peaking at 44% by the end of last year and creating a growing sense of unease within the nation.

The Bottom Line
The ILO reported that the global rate of employment stood at just 60.3% in 2011, which is 0.9 percentage points lower than before the widespread economic downturn of 2008. Several factors continue to influence the growth of global unemployment, including social, political and economic unrest. As these problems continue to undermine the global economy, sustainable recovery will remain a distant dream for many independent nations.

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