Friday, May 3, 2013

Unemployment in the Eurozone; Youth Unemployment in Spain 55.9%

Eurostat reported this week that euro zone unemployment rose to 12.1% during March, an all-time high. Youth unemployment for workers under 25 years old rose to 24%. Unemployment is especially high in Italy (11.5%) and Spain (26.7%). In Italy, youth joblessness is significantly higher at 38.4%, and shockingly high at 55.9% in Spain.

The unemployment is the result of multiple factors of government intervention in the economy. The EZ remains in the down phase of the European Central Bank created business cycle. Unemployment benefits provide incentive for people not to work. High minimum wage laws make it unprofitable for firms to higher many and regulations make it dangerous for firms to hire as it is difficult to fire an employee.

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