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Social unrest study

Hendrik Heinze / cdApril 9, 2013

With unemployement at unprecedented levels in the EU, the risk of social unrest is rising, says the UN's International Labour Organization. The ILO is warning politicians to abandon austerity and embrace job creation.

Image: picture-alliance/dpa

"When unemployment is as high as it is right now - as poverty and welfare protection become worse - then the danger of social unrest grows along with it," says Miguel Angel Malo.

Malo is a professor of economics in Salamanca, Spain - a country where youth unemployment is at 56 percent. Additionally he's an economics expert at the International Labour Organization (ILO), a UN agency seeking to promote labor rights.

It was for the ILO that Malo co-authored a paper with an unsettling thesis: the likelihood of social unrest is increasing. Or at least, it's becoming far more likely in certain areas of Europe.

(Photo: no info)
As a Spaniard, Malo has a personal stake in avoiding unrest in his home country and helping it recoverImage: ILO

More unemployment

According to the report, 26.3 million Europeans are unemployed - 10 million more than just before the outbreak of the crisis in 2008. For 22 of the EU's 27 countries, the labor market is in worse condition than before the crisis began. Just five countries have higher levels of employment than in 2008: Austria, Germany, Hungary, Luxembourg and Malta.

EU unemployment now stands at 10.9 percent, write Malo and his colleagues, which is 4.1 percent more than just five years ago. In the 17 countries that have adopted the euro as their currency, unemployment has risen faster than outside it, reaching a historic high of 12 percent in February 2013.

With little happening in the job market, unemployed EU citizens are now competing for fewer and fewer positions.

Idle hands

The conclusions the report draws are even more interesting than the bare statistics: if one looks at who the losers are, it becomes clearer exactly why the ILO is warning of unrest. The losers are made of three groups which have scarcely any access to the labor market.

The first group is young people: one in four youths - a group that includes those who have finished higher education but have not found work - is currently unemployed. In Spain and Greece it's more than half. In 26 of 27 countries, youth unemployment has risen since the beginning of the crisis. Germany is the only exception.

ARCHIV - Junge Demonstranten, die zur Bewegung "15-M" gehören, sitzen auf einem Platz in Madrid, Spanien, am 14.05.2012. Sie protestieren gegen die Spar- Arbeitsmarkt- und Bildungspolitik der spanischen Regierung. Die Arbeitslosigkeit in den Krisenländern Südeuropas liegt laut einer Studie auch im weltweiten Vergleich auf Rekordniveau. Das geht aus einer Länderanalyse hervor, die Internationale Arbeitsorganisation (ILO) in Genf für die «Financial Times Deutschland» erstellt hat. Demnach liegt die Erwerbslosenquote in Spanien und Griechenland mit über 24 beziehungsweise über 22 Prozent höher als in allen Ländern, für die entsprechende Daten vorliegen. EPA EPA/Javier Lizon +++(c) dpa - Bildfunk+++
Spain's "Indignados" protestors, or "indignant ones," are suffering the pain of unemployment firsthandImage: picture-alliance/dpa

The second group is the long-term unemployment, whose numbers have nearly doubled, from 5.8 million in 2008 to 11 million today.

And the third group is those with few qualifications: "unskilled labor" has been hit particularly hard by negative economic developments, much more so than skilled workers or university graduates.

Blowing its top

As to whether Europe will finally "blow its top," Martin Dieweld, a professor of sociology at Bielefeld University, doesn't believe so.

"I don't see any sign of that at all with relation to Europe," he told DW. Yet neither would he rule it out in countries particularly hard hit by the financial crisis, such as those on the Mediterranean.

"But painting the bogeyman all over the wall - I consider that over the top," Diewald added.

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Professor Diewald does not like alarmist claims - but does see reason for concernImage: privat

The risk of unrest cannot be measured precisely, but the ILO estimates that it's currently 12 percent higher in the EU than it was before the crisis. In order to reach this conclusion the organization developed its own evaluation procedure based on the views of those participating in surveys. "Our procedure is tied directly to people's living conditions," says ILO expert Malo.

Confidence down

As a rule, the ILO believes that the worse the EU's economic and political position becomes, the higher the risk of social unrest. That means the potential for social unrest has risen in countries such as Cyprus, Greece, Italy, Portugal, Spain, Slovenia the Czech Republic. Simultaneously, risks have lowered in Germany, Finland, Belgium, Slovakia and Sweden.

Diewald believes that risk should be judged on a country-by-country basis. Some countries have shown few economic problems up to this point, and in any case, citizens in crisis-struck countries are reacting differently.

In Greece, protests have already resulted in deaths. In Italy and Spain, by comparison, demonstrations have remained peaceful. "More and more, we're observing that well-educated youths in well-off countries are leaving," Diewald says. "It's more 'exit' instead of 'voice,' to quote the old line from sociologist Albert Hirschman."

Frustrated protestors often portray Germany (or Brussels) as the "bogeyman" of the eurozone crisisImage: picture-alliance/dpa

In order to avoid violent unrest, the ILO suggests that battered countries in the eurozone change course. Austerity measures, of which the ILO has been outwardly critical since the outset, should be replaced by a concentrated attempt to improve the job market. "Jobs must be as much a target as budget discipline or other economic goals," says Malo.

Among the ILO's demands are calls for wages and salaries that are stable at the very least and, at best, will actually increase. That would allow pent-up consumer demand to be released, injecting cash into the economy. The organization would also like to see more bank loans for small and medium-sized businesses as well as labor market programs and employment guarantees for young people.

All of which will hopefully prevent the proverbial lid from blowing.