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The Cost of European Austerity Measures: 10 Million Newly Jobless

U.S. lawmakers and policymakers who are pushing extreme austerity measures and spending cuts over job-creating investments as the magic path to economic stability should take a long hard look at what’s happened to the nations of the European Union (EU) that have imposed strict fiscal austerity policies.  Unemployment has soared, according to a new report on the EU labor market from the International Labor Organization (ILO).

There are more than 10 million more jobless people in Europe now than at the start of the crisis. There are now more than 26 million Europeans without jobs, with young and low-skilled workers being the hardest hit.

The report says the employment situation has continued to deteriorate since the introduction of fiscal consolidation policies. Following a pause in 2010-2011, unemployment has kept growing and shows no signs of improvement. Over the past six months alone, 1 million people have lost their jobs in the EU. Says the ILO report:

While fiscal and competitiveness goals are important, it is crucial not to tackle them through austerity measures and structural reforms that do not address the root causes of the crisis. Instead, moving to a job-centered strategy could serve both macroeconomic and employment goals.

In addition, long-term unemployment is becoming a structural problem for many European countries. In 19 of them, more than 40% of the unemployed are now long-term unemployed, meaning they have been out of work for 12 months or longer. Read the full report.  

In the United States, the sequester is the most prominent austerity measure and it is estimated the across-the-board cuts will cost more than 750,000 jobs this year alone and could derail the economic recovery. Proposed benefit cuts in Social Security, Medicare and Medicaid not only would hurt the most vulnerable, but also would drag the economic recovery.

The AFL-CIO is calling for repeal of the sequester, no Social Security, Medicare or Medicaid cuts, closing tax loopholes to ensure that corporations and the wealthiest 2% pay their fair share and investments in infrastructure and other job-creating vehicles.  

In a related development, Portugal’s Constitutional Court ruled several of the government’s harsh austerity measures unconstitutional on Friday. According to The Wall Street Journal:

The ruling said that plans to trim public employee wages and retiree pensions—while not touching the income of other groups—violated the constitutional principle of equality. It also overturned a planned tax on unemployment benefits.

This week the ILO’s 9th European Regional Meeting will bring together the government, worker and employer representatives from 51 European and Central Asian member states to discuss the way forward for the region in the context of the continuing financial, economic and social crisis.

The  ILO is a specialised agency of the United Nations, which has as its aim to promote rights at work, encourage decent employment opportunities, enhance social protection and strengthen dialogue on work-related issues. It is the only international agency in which worker and employer representatives from each of the 189 member countries participate on an equal basis with representatives of their governments in establishing international labor standards and shaping policies.  

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