Unemployment and exclusion brings EU cities to boiling point

ECB Governing Council Meeting and Press Conference of 2 June 2016 in Vienna. The President of ECB Mario Draghi (on the right) accompanied by the Vice - President Vítor Constâncio explained the Governing Council’s latest monetary policy decisions and answered questions from journalists at a press conference in the afternoon. The ECB is currently pumping hundreds of billions into the euro area banking sector, in the hope that ‘money matters’ and will help the real economy gain a sustainable and robust growth path. If not…

ECB Governing Council Meeting and Press Conference of 2 June 2016 in Vienna. The President of ECB Mario Draghi (on the right) accompanied by the Vice – President Vítor Constâncio explained the Governing Council’s latest monetary policy decisions and answered questions from journalists at a press conference in the afternoon. They are both pictured here in the Governing Council room.The ECB is currently pumping hundreds of billions into the euro area banking sector, in the hope that ‘money matters’ and will help the real economy gain a sustainable and robust growth path. If not…

Last Tuesday Eurostat, the EU statistical service release its latest estimates about the April unemployment rate and May inflation in Eurozone, which unfortunately didn’t diverge markedly from the gloomy predictions of analysts. This week however, the same source published a very interesting survey about the labor market situation in EU.

It’s a special report about employment and the poverty risk in the urban conglomerates of the Union. It revealed that the real unemployment rate amongst city dwellers is around 30% (only 70% are in employment), while 24% of this population lives on the brink of poverty. The title of the survey clarifies that only “7 out of 10 city dwellers aged 20 to 64 are employed”. Let’s take one thing at a time.

Menacing labor circumstances

Starting from the overall picture, Eurostat found that in the EU labor market “The euro area (EA19) seasonally-adjusted unemployment rate was 10.2% in April 2016, stable compared to March 2016, and down from 11.0% in April 2015”. The insignificant drop of unemployment during the past twelve months is not at all a comforting development.

The rate of jobless invariable remains in the double-digit area. But this fact doesn’t tell the full story. This newspaper has insisted more than once , that the headline unemployment rates, as they are reported by the statistical services of the EU member states and bundled together by Eurostat, cannot reveal what actually happens in the labor market.

Revealing the truth

It seems then that the people in the EU statistical service are not happy about that. So they conduct deeper and more extensive labor market research and have proved that there are large parts of hidden or outright massive unemployment lumps which are not included in the official overall rate or are being veiled within the headline percentages. This time it’s the city dwellers that have attracted the interest of Eurostat, obviously for very good reasons.

Traditionally, the European, and generally the western type urban conglomerates have always been the driving force behind every major political or social development. In this respect, the labor market situation of city dwellers is understood to play a major role in the wider socio-economic and political processes.

It may be true that in every major western society, the rest of the country may not follow the tendencies and the preferences of the urban populations, but the choices of the latter play a crucial role in shaping the future of entire countries, if not continents. For all those reasons and many others, the rates of unemployment amongst city dwellers present an issue worthwhile to be separately and deeply studied. This is what Eurostat did.

The back street people

In this line of thinking, the EU’s statistical service says that “Home to a large share of the population aged 20 to 64 in the European Union (EU), cities can be viewed as both the source of and solution to many of today’s economic, social and environmental challenges. Among EU city dwellers aged 20-64, 70% were in employment. The risk of poverty or social exclusion affected around 24% of all city dwellers”. For understandable reasons the writer of this phrase avoided mentioning, that the most important ‘challenges’ that the major cities are hosting are the political ones.

In any case, the truth is that only 70% of city dwellers have a job and almost one out of every four of urban people are at risk of poverty and consequently also of social exclusion. To be noted that according to the Eurobarometer (the public opinion analysis tool of the European Commission) the feeling of social and economic exclusion haunts every second European aged 15 to 30, with this rate ranging from 27% in Germany to 93% in Greece. No wonder then why adding together those two explosive social ingredients, and the city youths constitute the most unstable social element in our modern western world societies.

The dangerous alleys

Last week Eurostat also announced the April seasonally-adjusted overall unemployment rate in the euro area at 10.2% as in March and down from 11% in April 2015.  The slight drop of the overall rate most likely doesn’t mean anything, as far as the labor force of the European urban conglomerates is concerned. One out of four of them are still at the brink of poverty, while the young ones feel overwhelmingly excluded from the social and economic life.

There is more to it though. The finding that 70% of city dwellers are in some form of employment doesn’t not necessarily mean that at least some of them do not belong also to the 24% who are in the brink of poverty. It’s a fact that a large number of city dwellers despite in some ‘modern’ kind of employment, they continue to run the danger of poverty and what goes with it, social and economic exclusion. Mathematically, this appalling reality concerns more than 30% of the big cities populace.

The Range of Disinflation

Last but not least, it’s worthwhile commenting on the Eurostat release of its flash estimate about the May inflation, which still remains in the negative part of the chart with a -0.1% reading. Since last February the euro area headline inflation remains in the zero/negative region undermining any hope for a swift revival of the economy.

In conclusion, the Eurozone monetary area of the nineteen EU countries seems stuck in a stagnation trap. The only hope for a change comes only from the hundreds of freshly printed billions that the European Central Bank keeps handing for free to the banks. Given that this is the first time in the economic history, that the central bank floods the financial market with printed money at huge quantities and zero cost to the takers, the theory that ‘money doesn’t matter’ when it comes to real growth, may regrettably be proved right.

At the same time however, this money bonanza having failed to revive the real economy may have created utterly dangerous new financial bubbles. If this turns out to be the case, the latest fallacy that ‘many matters’ may be proved worse than the initial problem; the stagnation. And the question comes freely; how are the city dwellers  to react in a new and more devastating financial crisis?

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

A Europe that Protects: Commission calls for decisive action on security priorities

How the diaspora is helping Venezuela’s migration crisis

GSMA Mobile 360 Series – Latin America, in association with The European Sting

1 million citizens try to create a new EU institution

Can free trade deliver cheaper renewable energy? Ask Mexico

On the first day of 2019, over 395,000 babies to be born worldwide: UNICEF

Qualcomm to be the next target of EU antitrust regulators? China might be the answer

Scoring for the environment: what Mathieu Flamini’s top-flight football career taught him about leadership

CEOs in these countries are more likely to go with their gut

Pandemic mental health: the urgency of self-care

Financing fossil fuels risks a repeat of the 2008 crash. Here’s why

Changing how we produce and consume: New Circular Economy Action Plan shows the way to a climate-neutral, competitive economy of empowered consumers

Your smartphone may know more about your mental health than you

Future Forces Forum: Prague will be hosting the most important project in the field of Defence and Security

Gig workers among the hardest hit by coronavirus pandemic

EU budget: Reinforcing Europe’s cultural and creative sectors

Stepped-up efforts needed to combat pneumonia; save nearly nine million children’s lives

COVID-19: What to know about the coronavirus pandemic on 6 April

Brexit and migration dominates the debate on October’s EU summit

EU-Turkey relations: Will Turkey manage to revive the EU accession process talks?

European Semester Autumn Package: Creating an economy that works for people and the planet

Burundi: Inclusive dialogue ‘only viable option’ for resolving country’s political crisis says, UN envoy

EU Youth Conference in Amsterdam: enabling young people to engage in a diverse, connected and inclusive Europe

Africa-Europe Alliance: first projects kicked off just three months after launch

Here are 4 of the most politically charged World Cup games ever played

This chart shows the total number of COVID-19 cases and recoveries so far

Supporting the recovery: MEPs adopt budget priorities for 2021

This is how the Western Balkans will become more innovative

EU out to conquer African Union summit

Nearly half a billion people can’t find decent work; unemployment set to rise: new UN labour report

With potential to boost profits by up to 20 per cent, a woman’s place is at work, says UN labour agency

Junior Enterprises as a solution for Youth Entrepreneurship

Spring 2019 Economic Forecast: Growth continues at a more moderate pace

UN chief condemns suspected Boko Haram attacks targeting Eid al-Fitr celebrations in Nigeria

IMF: The near-term outlook for the U.S. economy is one of strong growth and job creation

Capital Markets Union: Making it easier for insurers to invest in the real economy

Germany loves a strong euro; the new Fiscal Councils can deliver despite the Greek chaos and a wider questioning of austerity

Can Greece’s devastating economy deal with the migration crisis?

Do men and women really have different leadership styles?

We can build a carbon-neutral world by 2050. Here’s how

New identity cards deliver recognition and protection for Rohingya refugees in Bangladesh

Indonesian tsunami death toll climbs over 400 as Government-led relief efforts are stepped up

These 11 EU states already meet their 2020 renewable energy targets

International Court of Justice orders Pakistan to review death penalty for Indian accused of spying

Mother of all mergers between Facebook Messenger, WhatsApp and Instagram: EU Data Privacy restrictions against Facebook’s imperialistic plans

Antibiotics are contaminating the world’s rivers

New ECB boss quizzed for the first time by Economic Affairs Committee

MEPs back update of rail passenger rights across EU

Batteries included: how better storage can transform renewable energy

Venezuelan crisis: MEPs reaffirm their support for Juan Guaidó

‘Reasons to hope’ for sustainable peace in Central African Republic – UN Mission chief

Four million Syrian children have only known war since birth: UNICEF

Germany fears that Americans and Russians want to partition Europe again

Radio still a powerful worldwide tool for ‘dialogue, tolerance and peace’: Guterres

More women and girls needed in the sciences to solve world’s biggest challenges

Stronger partnerships with post-conflict countries needed to ensure ‘path towards durable peace’: UN chief

I accidentally went viral on TikTok. I learned we failed our youngest generation.

Code of Practice against disinformation: Commission calls on signatories to intensify their efforts

To retire at 65, American millennials need to save almost half their paycheck

New EU rules cut red tape for citizens living or working in another Member State as of tomorrow

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s