Germany enjoys lowest unemployment while Spain basks in the highest joblessness - why?
Tuesday, 17 April 2012
Germany and Spain are a huge contrast when it comes to harder workers in Europe. Germany enjoys the lowest unemployment in recent years while don’t know what to do with all the unemployed people it has.
But according to Swedish reports, Germany’s low unemployment is partly down to luck, according to the researchers.
Unemployment in Germany is the lowest in 20 years. On the flip side in Spain, the level is the highest since records began in the early 90's. It has not always been like that. As recently as 2007, Germany had a higher unemployment rate than Spain. But then it went rapidly downhill.
"For both Spain and Ireland’s low unemployment rate in 2007 was due to the construction boom. But suddenly house building came to a stop, "said Eskil Wadensjö, professor of labour policy at the Institute for Social Research, Sweden to the Swedish business daily Dagens Industri.
In the past five years the two countries changed direction with each other and the number of the unemployed in Spain has now passed the five million people. According to the latest figures from Eurostat, the unemployment rate in Spain, 23.6 percent.
In Germany, only 5.7 percent are unemployed, according to Eurostat figures for February, a country with more than 80 million people, thereby contributing properly to keep down the average unemployment rate EU wide.
Professor Eskil Wadensjö says that Germany's ability to keep its unemployment this low to some extent has been about luck because they have invested in the "right" industry.
The country has a strong manufacturing sector that could have gone down on shorter working weeks during the 2008 crisis, just as Scania did. But the weak demand proved to be temporary.
He is backed by Professor Hubert Fromlet at International Business School Jönköping.
"It's luck and skill at the same time. But luck one get when he or she does something that is fundamentally right from the start. Germany is an export nation to China and other emerging economies, "he says.
Eskil Wadensjö says that Sweden's situation is very similar to the German. That we have managed with relatively low unemployment because we have the "right" type of industry.
By Scancomark.se Team
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