Unemployment in the European Nations Italy, Spain, Portugal and Greece Essay

Unemployment in the European Nations Italy, Spain, Portugal and Greece - Essay Example Unemployment in the European nations of Italy, Spain, Portugal and Greece The thing that makes unemployment most dangerous is that it directly affects the growth of a nation. Indefatigably high levels of unemployment have become a common scenario throughout most of the European Union. Although, it contrasts considerably with the comparatively low unemployment levels in neighboring developed nations, especially in those of the United States and Japan. Inspite of the fact that high unemployment rate is rendered as a common problem in European unions, there are significant variations in the unemployment rates of each of its members1. Despite being amongst the developed European countries, unemployment rate in Spain, Italy, Portugal, and Greece is rising at a staggering rate. The Problem of Unemployment Unemployment in Spain The contrasting difference in the unemployment rate of the European nations was essentially recognized in the unemployment rate of Spain. In the year of March 2004, it was evidenced that the unemployment rate in Luxemburg was at a low of 4 .0%, while in Spain, it reached a mammoth 11.1%. It is significant that there are other factors idiosyncratic to each of those nations with soaring unemployment rate results to this problem. This phenomenon is essentially true in the case of Spain, as persistently high level of unemployment has been recorded there. The scenario in Spain was once so dismal that unemployment rate recorded was twice the average of the European nation’s unemployment rate. High unemployment rate is currently a problem that is encountered by all almost all the major nations of the European Union. ... condition is so dismal, that it is the high level of unemployment that essentially distinguishes the economies of the European member countries with that of the United States. The situation is problematic as, underutilization of resources takes place due to the low level of unemployment. This simultaneously results in decline of the total production of goods that could have been achieved in a stable employment situation. This instigates the citizen of Spain to migrate into other countries if they are unable to obtain proper employment conditions in their native country. It is a general phenomenon that people want to allocate to work places where they get higher wages for their work. Acknowledging the reason of unemployment from a neo classical perspective, several key elements can be identified. The primary among them is the actual factors related to job search. The job market is never stable, as the frequency of workers changing jobs is essentially high. Although the problem takes a larger shape when this changes in job takes a long time due to heterogeneity of the work force and job openings. This implies that there is no significant balance between the labor supply and the labor absorption in the market. This condition is due to the lack of job openings, lack of proper information about employment, and the cost of retraining that many workers are unable to cope up with. Another factor that contributes to low employment is rigidity in the wages of workers, due to labor legislation and significant influence of labor unions. The wage rigidity’s effect is essentially noted when the prices of goods fall due to the decrease in demand for products, which simultaneously decreases the marginal productivity of workers. In this scenario, due to rigidness of labor supply in