Tag Archives: Social security

The Unemployment Conundrum

This article appeared on HRMagazine.be (loosely translated by me) :

In January 2012, the unemployment rate in the European Union rose by 0,1 percent to 10,1 percent. One year ago, the unemployment rate was 9,5 %. That same evolution is noticeable in the Eurozone: 10,7 % in January 2012, 10,6 %  in December 2011 and 10,0 % in January 2011. Belgium rose from 7,2 % to 7,4.

Eurostat estimates that the amount of unemployed workers in January in the EU27 at 24,325 million of which 16,925 in the Eurozone. That is an increase of 191.000 people in the entire European Union and of 185.000 people in the Eurozone as opposed to the month before. A year ago, the amount of people without a job grew by 1,488 million in the European Union (1,221 million in the Eurozone)

It seems like it’s always the same countries with the highest and lowest rate. The lowest unemployment rate was noted in Austria (4,0 %), The Netherlands (5,0 %) and Luxembourg (5,1). The highest was in Spain (23,3 %), Greece (19,9 %) and now Ireland and Portugal as well (both 14,8 %)

The unemployment rate between men and women is equally high this month. 10,1 % (last year men: 9,4 %, women: 9,6 %). In the Eurozone, the unemployment rate is higher for women (10,9 %) than for men (10,5 %). Unemployment among young people increased significantly: from 21,1 % a year ago to 22,4 % in the EU (from 20,6 % tot 21,6 %). In Spain (49,9 %) and Greece (48,1 %), every 1 in 2 young people don’t have a job; in Slovakia it’s 1 in 3.

The United States of America closed the month of January with an unemployment rate of 8,3 %. In Japan, this figure was 4,6 % in December.

Now, I know it’s a lot of figures and percentages but I find this very interesting. It shows how much impact the current economic crisis has in the European Union. Especially in Spain, Greece, Portugal and Ireland which are the countries in the biggest immediate danger. Companies are going bankrupt, people lose their jobs and can’t find a new one because of cuts in the workforce budget. It’s pretty much a vicious circle in the sense that people losing their jobs have less money to spend which in turn is bad for the economy as a whole resulting in more budget cuts and savings.

I believe that the HR department of companies can, in cooperation with the governments, have a large impact on the rising unemployment rate. Companies and governments should work together to draw more people back to the workplace by motivating them, cutting social security or lowering salary costs.

Obviously, that’s easier said than done. Especially in Belgium where so many people rely on our social security system for (temporary) unemployment, pensions and illness. Though, I believe that we could do with some sanitation. For instance, there are (to my knowing, ie. Not funded in figures) quite a lot of people who get money from our social security because they’re unemployed but have no desire to work anymore. Why should they? They get money for doing nothing, in some cases even more than they’d get if they had a job (usually a low educated demographic, and thus less motivated because those jobs often don’t have a lot of intrinsic rewards). We should try to encourage those people to go out and find a job again (and there a job enough for everyone really, it’s just that some jobs are seen as bad or below their standards.

And I don’t mean offering more salary. I’m talking about intrinsic motivation and non-salary benefits.

Furthermore, the social security system we have in Belgium is becoming unaffordable because there’s more people retiring and living longer than there are new entrants to pay for those pensions. We’ll all have to work longer than we do now (the average age for retirement in Belgium is only 58), and that’s fine by me. But I know a lot of people who are against this measure and are doing everything they can to retire now, or work fewer hours straining the system even more.

I feel that I can’t offer any concrete solutions for this problem, as it has many facets and issues to consider and I’m in no way an expert in that area. I do, however, believe that the solution is for companies, non-profit government organizations  and governments to work together to tackle this problem. And yes, this will require an investment from all parties.

In any case, I fear that we haven’t seen the end of this yet …


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