Could the European Recession be Permanent?
According to a new report released by the IPPR, the European recession’s worst effects, such as unemployment, are at risk of becoming permanent as time goes on. This report, part of JPMorgan’s New Skills at Work program, studies the lasting effects of the EU recession.
According to figures released in the study, almost 28 percent of the European economy’s working population is currently inactive, with about 10 percent facing unemployment. In addition, the report found the European recession is also causing underemployment rates of just under 6 percent.
The IPPR also took a look at the UK, finding despite solid employment growth and increasing wages, productivity is still a challenge for workers in the UK. Output per hour worked is about 17 percent. This figure is much lower than what the UK saw before the EU recession hit.
The study by the IPPR found the UK’s training efforts for employees has also fallen by about four percent in the last eight years, more than any other European economy. Cuts to education and adult skills mean apprenticeships could fall well below target rates, meaning many entry-level UK workers could have trouble finding good jobs in the near future.
In addition to releasing this report studying the effects of the EU recession, the IPPR will host and also address these challenges at the European Jobs and Skills summit. This event brings together both business leaders and policymakers from all European economies. Here, they will launch yet another report that studies employment trends and skill development in the EU28, as well as Germany, the UK, Italy, France and Spain.
According to the IPPR, the long-term decline in workforce skills means policymakers in the EU will have to work to create better training programs and encourage lifelong skill development, which will allow workers to grow, earn higher wages and boost productivity. The report also warns continuous underperformance of these European economies caused by recession and financial crises could become structural issues. Several challenges, such as rapid technological advances and other economic development, mean continuing changes in the workforce. If underemployment continues, workers may find themselves unable to perform in the workplace, leading to skill gaps when looking for new jobs.
The IPPR goes on to highlight three priorities needed to meet the challenges of the recession: tackling youth unemployment, upgrading skills to boost productivity and matching training to needed skills. These improvements will help break the cycle of recession, while ensuring the EU’s working population is able to get back to work.
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