After spending five months studying abroad in Barcelona, Spain and traveling all over Europe, I am extremely happy to attend school and live in the United States. Spaniards between the ages of 18-25 have an unemployment rate of over 50%. So in a lecture of 80 people, less than 40 will have a job leaving college. Compare that to U.S. rate somewhere in the mid-teens, and no American student should complain. In addition to the college student age group, overall unemployment in Spain is about 25% while the U.S. is 8%. Most people wouldn't complain about an 8% unemployment rate, but everyone still sees the "American Dream" and expects perfection- a type of utopia. But as we have seen primarily over the past four years, this view of America is dwindling as jobs are lost rather than created.
With so many differences culturally, politically and geographically, it is difficult to accurately compare America and Europe. The point is: American citizens need to realize that their country is still in a much better position than most places in the world. This should not be taken for granted as people must continue to work hard and not expect the government to clean up the mess and fix everything all at once. Consumers must continue to consume and investors must continue to invest.
While
America's current economy is weaker compared to previous decades, the
government still has the ability to turn things around through "normal"
reforms. On the other hand, Europe, particularly Spain, has turned to some rather radical measures to turn around their economy. For example, in a recent post on the blog "ThinkFast ThinkNow" the idea of a EuroVegas is outlined and discussed. The basic idea involves constructing a Las Vegas-like area either in Madrid or Barcelona to create jobs and pump money back into the economy. Certain barriers such as smoking laws and tax issues must first be figured out, but the fact that the government is building casinos to jolt their economy is quite scary. In the end, while the situation in the U.S. may seem bad, it is nothing in comparison to what Spain and the rest of Europe is going through.
I really like this post. I had no idea what the unemployment situation was like in other countries but I think it really highlights the fact that Republicans unfairly criticized Obama for not completely fixing the economy in four years while the economy was in crisis globally. Obama has made improvements over the past four years and will continue to improve the unemployment rate but in the meantime Americans should look at other countries and see what their unemployment rates are before they place blame.
ReplyDeleteThis all goes back to the economic concept of the natural rate of unemployment. William Phillips created the Phillips curve in 1958, accurately relating unemployment and inflation in an inverse relationship. So if inflation was high, unemployment should be low. The idea still has some contention to its validity, but it has proved accurate for the United States over the past 60 years. So looking at the rate of inflation for Spain could be an interesting analysis of their situation. The natural ate of unemployment plays into this situation because every country has an equilibrium amount of unemployment, about which the true value constantly fluctuates. In the United States, this number has historically been around 8%. Looking at Spain however, we can see that their unemployment fluctuates around about 15% and hit an official high of 25% this year. A useful tool for this economic analysis, and the one I used for these figures, is www.imf.org/external/
ReplyDeleteThis relationship between inflation and unemployment is intriguing, however despite high levels of unemployment in Spain there is no inflation, because there is no money (government measures are too austere). If the ECB would pump liquid into the system to generate some inflation, some economists predict it would jumpstart the economy. Read about it on my blog here: http://cidissentship.tumblr.com/post/37537847350/fixing-the-euro-crisis-lessons-from-the-us
DeleteAmerica H.
This is really interesting. I never think much about the unemployment rate in other countries before complaining about ours. It's good to be informed about the rest of the European nations and their economic problems in order to get perspective on ours.
ReplyDeleteAs we all know, many European nations are struggling economically right now. I would be interested to look into the unemployment rates of some of the more "stable" countries in the European Union (mostly Scandinavian nations). It was really saddening to see people make comments on Facebook about dropping out of college because they would never get a job after Obama's re-election. First of all, this is a completely uninformed position because we have no idea what, if anything, Romney would have done to drop the unemployment rate. In my personal opinion, the unemployment rate would have just increased due to the fact that Romney does not think it is the government's responsibility to create jobs. There is no reason to believe that our economic (particularly jobs) climate would be any more favorable under a Romney/Ryan administration. And, as you point out, our unemployment rate is so small compared to that in other areas of the world. Rather than complaining about the current state of affairs, we should get to work on finding solutions and jobs for the Americans who are currently unemployed.
ReplyDeleteI'm not well versed in economics, but I think it would be interesting to see how unemployment rates play out in terms of population growth and expected economic growth. In know the U.S., based on its population growth, must maintain a certain annual increase in economic output to remain, I guess, competitive. European countries on the other hand have a stable population (some declining), and thus don't need to maintain the same annual increase in economy. That maybe why our increase in unemployment, while still a lower percentage, seems more damaging. In addition, european countries have so much state-run aid and support that being unemployed must be much less of dire situation as it is here in the states. That is an assumption on my end, but if I was unemployed, I sure as hell would want to be unemployed in a country where education, medicine, food etc. was paid for.
ReplyDeleteAs soon-to-be graduates of college, we should understand how unemployment affects us. In Spain, not only do young people not have jobs, but they continue on for long periods of time living at home with their parents. While some of it is cultural, it is also greatly related to income. Additionally, the situation in Madrid has been so bad that many people are forced to commute. In the home-stay I was in, I only saw the husband twice in my 4 months since he was traveling to Valencia to make ends meet. And guess what, he was staying with his parents since he could find work there and not in Madrid. From interviewing young adults in Granada, many of them are unemployed and/or living at home.
ReplyDeleteAdditionally, Spain's drastic economic situation has caused a lot of political unrest. I'm curious to see if the same sorts of protests that occur in Spain would ever be capable of happening here. A few months ago, Spain had a day in which pressure from a political group shut down the entire economy, known as La Huelga General (or the General Strike). People were told not to go to work, classes were cancelled, flights were cancelled, and the public transportation systems were preemptively shut down. ATMs were slashed and keyed, and in some extreme cases, violence broke out as people were hostile towards those who worked despite the warning. While I don't think the US currently would be that vulnerable to feel pressure from certain political parties to shut down work for the day, it will be interesting to what more demonstrations emerge if our economic situation worsens.
In attending mentoring sessions, panels and even just talking to professionals that are friends of my parents, I constantly here some version of,"well all I know is I wouldn't want to be entering the job market today". Its a scary thought that just going to a good school like USC is not enough to ensure a job out of college. However, I think it would be a disservice to ourselves if we only compared ourselves to countries worst of and said "its not that bad". I think we should look to countries that are working hard, like China, and push ourselves to work harder. Join more extracurricular activities, do everything possible to get that A, participate in internships and seek out mentors and job opportunities early on, by doing theses things we can ensure that we are the best possible candidates for the job. I think many times we focus on the bad, without seeing it as an opportunity to try our best and work our hardest. Whether you like it or not we live in a survival of the fittest type world.
ReplyDeleteI definitely agree with this post. I also think it important to recognize the mistakes that Europe has made and learn from them. We should not be making the same decisions that Europe made and expect a different outcome. It is the definition of insanity.
ReplyDeleteThat being said, I think that we should look at countries, which have high productivity and use that as motivation to increase our own productivity. We shouldn't take the stance of "well it could be worse, look at Spain." Instead we should push ourselves to be better than our competitors.
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ReplyDeleteI believe that a huge reason why many Americans are so frightened by an 8% unemployment rate (though pretty high by U.S. standards) is that the news media has perpetuated it to be such a HUGE problem. Rather than be informative, every day the news media becomes more of a propaganda machine that instills fear rather than hope. Don’t misunderstand me; I do think current U.S. unemployment is a problem and one which could benefit from some relief, but when people are constantly (daily) reminded of the problem, it hits the psyche so hard, that it almost makes one think it is bigger than it is. You couple that with politicians making lower unemployment rates part of their agenda, and it becomes a “purely” America problem leading us to forget that the rest of the world has survived on unemployment rates much higher than ours. As many of the other commentators of this blog post have already mentioned, at the end of the day preparation, hard work, determination, and a positive outlook on the dim situation will increase one’s chances of finding employment.
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