
Southern Europe Has Not Seen Net Job Creation in over a Decade - Four_Star
http://thesoundingline.com/southern-europe-has-not-seen-net-job-creation-in-over-a-decade/
======
angarg12
Is not even an issue of number of jobs, but of quality of labor. Spain grew
economically in the 70s and 80s because it was a developing country, and could
provide cheap labor to neighboring countries. The growth in the 2000s came
from a massive housing bubble that didn't end well for most involved. As we
became a developed country we didn't know how to reorient our economy. Now we
are too expensive for cheap labor, which is relocating elsewhere, neither we
are specialized or competitive enough to oppose other strong economies. Some
times I have evaluated the possibility of going back there and try to make a
career in tech. It just takes a couple of conversations with locals to erase
that idea from my mind. The country is not socially tailored to attract and
retain highly skilled specialized workers, and sadly it's an issue that I
don't hope to see changed in the future.

~~~
hn_throwaway_99
Having a single monetary policy for countries as different as Spain and
Germany, with no real shared fiscal policy, is a direct contributor to this
malaise.

If they had separate currencies, Spain could inflate away a lot of their debt.
This would cause a bunch of pain for your average Spaniard, but it would also
mean that Spain's currency devaluation could drastically help its exports (and
of course one of Southern Europe's most valuable "exports" is tourism). A
direct consequence of being on the Euro is exactly what you point out: labor
isn't really cheap enough to be competitive.

~~~
pif
> If they had separate currencies, Spain could inflate away a lot of their
> debt.

Which is why Euro is good for Southern European countries: it forces them to
concentrate on productivity rather than economic alchemy. Spanish labor got
too expensive? You don't need a government to inflate your currency, you just
start lowering your rates. My fellow Italian workers cannot find a job? Stop
talking about "articolo 18", stop looking for assured indefinite term
contracts, accept the reality! Enterprises know ups and downs: when thing go
well, they'll be happy to pay you good money for your services, but when hell
breaks loose your salary will be a burden for them. Either accept that
employment contracts can be terminated before your retreat, or keep up the
good work... uh, keep up the work... just keep up!

~~~
batteryhorse
The Euro has caused their debt to appreciate, so now they owe more money in
real terms because the currency doubled in value. Meanwhile, Germany is able
to export their goods without any currency risk. And now you have another
layer of bureaucracy. The real issue is that when they created the Euro, they
failed to consolidate the debt of all the nations. It's only a matter of time
before the whole thing collapses.

~~~
krageon
The Euro took away the single most painful thing still plaguing travel between
EU countries. These days an EU citizen can up and leave to a different EU
country with very little friction (aside from the language in some places),
which was the idea. That goal was achieved.

It is unrealistic to expect that countries will somehow not be able to solve
their financial issues just because they lost one tool. That's an excuse, not
a reason.

~~~
mnl
They lost control of their own currency. That's not just "one tool". It
doesn't work and without full economic integration it never will. I think I
know what I'm talking about as I'm living with this problem, have analysed it
thoroughly because I have nothing better to do, know the history of this
southern European country and their people, and as a result of all this I
can't trivialize it by simply making up the belief that it'll be fine at some
undetermined point in the future. It's more like the death by one thousand
cuts, in slow motion.

~~~
pif
> They lost control of their own currency.

Germany lost it, too. If it worked for Germany, why not trying to learn from
their experience rather than keeping complaining?

------
sonnyblarney
For the same reason jobs are not created as much in Wyoming or Vermont so much
as they are in LA or NYC ... the jobs are being created, it's just that
they're in Germany and the UK and not Spain.

Part of the issue is that Spain & periphery tend to have fewer 'large
industrial conglomerates' that enable profitable things to be done at scale
(i.e. making cars etc.). % people employed at companies with >1000 people is
much bigger in Northern Europe - which makes it more difficult to compete in
the periphery.

But really, this is what can be expected with a true Union in Europe, and it's
why Germany is so keen on it, and of course the Lib Dem (i.e. business types)
are super keen on it in the UK, despite populist upset over Brexit.

The short run advantages of common market and supposed common risk of the Euro
(which never happened), the downside is that skilled people are flooding out
of the mediocre areas into the competitive areas.

Portugal is turning into a nation-sized retirement home, sadly.

In an odd way, this might actually be a 'net good thing' economically, because
Germany might be better at putting people to productive use in industry ...
which is why the Lib Dem types like it (i.e. they see the economics) ... but
really this speaks to an existential challenge to the very nature of European
nations and peoples.

~~~
sveme
Portugal seems to be very attractive to northern European tech and media
freelancer types, know a couple of guys who live and enjoy Portugal and work
for German companies remotely. Pretty attractive, would do it myself if it
wasn‘t for the kids. Those guys are more likely to expand, build startups and
employ people, who knows what it might lead to.

~~~
intrasight
I too am excited by what's happening in Portugal. Safe place, good food, great
weather, internet is improving. These things get noticed by mobile
professionals. I'd not be surprised to find myself there next year.

~~~
galfarragem
Thanks for embellishing Portugal. As a local, I'm not as bullish as you.

Portugal is nowadays a paradox: it has 2 contrarian political systems. One for
locals (pro-socialist) and another (raw liberal) to attract foreign money.

E.g: Foreign pensionists don't have to pay taxes, €500k 'investment' (buying
an house is enough) will grant you citizenship, Websummit (and consequently
raw capitalism) was seen as the Truth by government. All this done while
rising taxes for local middle class (freelancer's taxes are a joke),
advocating a rigid job market and other ideologic measures that promoted a
brain drain like never before.

Yes, Portugal is a great contry for hollydays and retirement, but, sadly, it
stops there. However, if you afford to live as a semi-retired (like many
remote devs) it might worth it: sun, sea, food and safety (on the places where
you'll be at least).

~~~
intrasight
I don't understand. If one becomes a citizen, doesn't one become a "local"?

~~~
galfarragem
Citizenship buyers don't want to be a 'local', they just want full access to
the EU.

My point here is that Portugal literally sells EU passports without many (if
any) questions.

------
kbcool
Wow...about the same level of journalism/fact checking as expected these
days....none.

Let's compare the workforce of countries with an ageing population and rapidly
dropping net population with countries like Australia that are absorbing 250k
immigrants per year into "self employed" (read: rich third worlder's buying a
house and a passport) of course you're going come up with a figure like that.

Throw in some countries with massive populations who have also got an ageing
population but have 20x the population of Portugal to make them look bad on
absolute numbers and you have a winner. Of course a tiny change in employment
is going to look amazeballs or on the other hand terrible.

The difference is..being in one of those countries right now but from the
greedy nation of Australia is that sustainability is practised. It's not all
about greed here. You don't need to destroy the planet to have a family here
so seriously a big middle finger to anyone who thinks that Europe not growing
is a "problem".

~~~
jp555
Economic growth = learning to do more with less, and arbitraging profits.

The myth that economic growth means more waste is just wrong. Compared to the
early 20th century we use ~90% fewer resources per dollar of GDP created.

~~~
vkou
You forgot to subtract inflation * population growth.

You can grow your economy, without actually becoming more efficient, or
profitable, by tweaking either of those parameters.

------
rm_-rf_slash
I wish TFA had more detail about the conditions within each country. You can’t
just treat northern Italy and southern Italy like they’re the same economy.

~~~
axaxs
As someone unfamiliar with Italy, would you mind to explain a bit?

~~~
Arnt
The (far) north of Italy is a bunch of Germans that happen to speak Italian
and wear better-looking clothes. The South of Italy is a bunch of nogoodniks
who live on handouts from the north unless they... I'm tired of overblown
stereotypes already and can't find a suitable mafia-related slur.

But even though that previous paragraph was overblown there are differences.
Maybe because of the Mafia's firm grip, maybe for other reasons. The Italians
seem to feel rather strongly about the differences. Google for "italy
mezzogiorno" if you want more.

[https://en.wikipedia.org/wiki/Autostrada_A3_(Italy)#History](https://en.wikipedia.org/wiki/Autostrada_A3_\(Italy\)#History)
and ponder the sums and delays. It'll make you feel better about the cost
overruns wherever you live ;)

~~~
21
Maybe, but at the same time, a bigger country is always better. Splitting
Italy into two would be worse long term for both halfs.

You have the same talk in US, that California and New York pay all the taxes
and carry on their back other "unproductive" states.

~~~
Udik
> at the same time, a bigger country is always better

Why so? And for whom, exactly? Do you think the US would fare better overall
if they joined with southern countries like Mexico, Guatemala, Nicaragua,
Venezuela and Colombia?

Also, Italy is inside the EU. I'm not sure that inside a supra-national entity
as the EU the reasons for building bigger nation-states- reasons that were
surely valid in the 19th century- still stand.

~~~
Nasrudith
Induction gives a hood answer. Would your country be better off balkanized
with many small territories feuding and redundant administration on every new
level? While there are occasional scaling issues there is a synergistic effect
to larger unified territories - as opposed to actively occupied ones.

Joining together would be a long term investment for the US. Given how well
trade matches as size of neighbors attenuated by distance roughly it would pay
off long term. Short term at least a significant minority would probably be
discontent about it given what happened just with German reunification and
they weren't even apart for a century.

~~~
bobthechef
Redundant administration? By that logic, you might as well create a one world
government, but it's a piss poor idea.

Consider that redundancy is good in that it creates multiple points of
failure. Consider that bureaucracy will scale with the size of the country and
not necessarily in the efficient way you think it would. Consider that
regional needs and cultures vary dramatically. Even in individual countries,
subsidiarian governance is good in that it best matches law and policy with
the particularities of each region because local authorities have better grasp
of local issues (and where matters are escalated only as necessary). Blanket
statements about bigger being better are flatly wrong. And where the US is
concerned, the US benefits greatly from a very fortuitous combination of
geopolitical factors. Russia, on the other hand, expanded eastward with no
such commensurate benefits.

------
cherdak
I am every time astonished by the low level of analysis of this kind of
situation and how dogmatic is the explanation : too high taxes, too much
regulation. First of all taxes can seen as an investment of the citizens for
better life. So the problem is not the high level of taxes, but how they are
used and in what purposes. Certainly, PIGS should optimize many processes and
promote initiatives ( business but also social....). Remember that PIGS are
the most impacted by migration now. Remember that most were dictatorships many
decades ago and have not the same foundations of democracy and economic
prosperity than other countries. Remember that many young people that could
create jobs just moved in others countries and didn't come back. Remember that
you don't have the same impact when you are poor than when you rich. We you
are poor you look for more immediate results because it is a matter of life.
Remember the role that play mafia/corruption/ criminality, especially the
white collar one!! I don't think the Euro has a so big impact and there are
plenty to doin order to reach a good growth. However the growth is the result
of wise and pragmatic moves which can reach a 2% per year in long term (
according to Angus maddisson from OECD). But it is the good decisions and
actions that provides efficiency and so growth, not stupid and blind cut in
budget. For OECD , the top down approach of spending money is always bad (
Keynesian approach), but the top down of saving money is ever good. What an
hypocrisy which can influence a policy that can destro many life's.

------
_Codemonkeyism
It's funny how Germany is called out here again and again.

The EUR was forced on Germany by France (Mitterrand) as a precondition for
reunification. Germany was dragging its feet with a common currency and needed
be dragged towards a EUR.

The French intention was to controll a unified Germany with a common currency.

------
desu_
I searched for "underground", "black" (market/economy) and "undeclared" in the
article, but it yielded no results. I am surprised given that (1) the rise of
the underground economy is common knowledge for people knowing a bit about the
region and (2) measuring its size is a mainstream academic question.

~~~
rb666
Same reason that watching pirated movies/shows is not counted in viewership
statistics. It's illegal, you don't get credit for it. Taxes exist for a
reason.

~~~
desu_
Viewership statistics of movies do not take into account pirated movies mostly
because it's difficult to count. Tax offices might only care about movies
sold, but producers regularly try to estimate their losses due to pirate
channels, and I am sure that people who measure viewership as a proxy for
impact on the popular culture would love to have to be able to count everyone.

The article's author makes some observation on employment volumes in Southern
Europe, then decries _" the Eurozone's failure to implement meaningful pro-
growth reforms"_. In that context, It makes sense to try to estimate how much
of the economic activity has simply been reclassified. The fact that it isn't
taxed makes it, once again, more difficult to measure (if that's what you
meant by your _" Taxes exist for a reason"_ truism) but not irrelevant.

------
chiefalchemist
The first graph is in absolute numbers, shouldn't it be in percentages?

Along the same lines, where is the birth rate? And death rate? And general
population growth / delta?

Finally, has, for some reason, automation been a better fit for the industries
in these regions?

I need more data. I need more information.

~~~
c3833174
Well, there's hundreds of abandoned-looking industrial buildings in my area
that are actually filled with CNC machines and only have 3,4 employees

------
dzink
I wonder how much of that is gray economy. Greece has massive underreporting
of anything tax and business related, because they don’t verify it. Farms and
businesses don’t report actual sales, earnings, probably even employees
(anecdotally from locals reporting of income is less than 10% of actual).

Spain has a problem with permanent labor given to senior employees with most
youth being excluded from full time jobs. There is also some type of earn-in
system to get to a full time job. If a lot of local industry is tourism, those
can be filled with temporary work as well, that is probably not accounted for
in these statistics.

~~~
coldtea
> _anecdotally from locals reporting of income is less than 10% of actual_

Factually this is BS. While there's underreporting in Greece, way more than
"10% of actual" income is reported -- closer to 70% or 80% [1].

And one of the reasons it's not higher it's that there are quite high taxes
(including a 24% VAT on most purchases) for little to no return from the state
(no good healthcare, no money for schools, no road maintenance, etc). It's
like sinking money down the drain.

([1] In fact a study by the Applied Economic Research at the University of
Tübingen in Germany puts the whole Greek "shadow economy" to 20% of the GDP --
for comparison Germany's is around 10% and USA's around 5%:
[https://www.forbes.com/sites/niallmccarthy/2017/02/09/where-...](https://www.forbes.com/sites/niallmccarthy/2017/02/09/where-
the-worlds-shadow-economies-are-firmly-established-infographic/#27d5abe7742c)
).

~~~
fao_
> no good healthcare

I'm sorry, what? The WHO puts the Greek healthcare system at #14. The UK is at
#18, Sweden at #23, Germany's healthcare system is at #25, and Canada, Finland
and the US are at #31, #31, and #37, repsectively [1][2]

And a more recent paper from The Lancet[3] puts Greece at #19. Sweden,
Finland, and Canada have usurped Greece coming in at #4, #7, and #17,
repsectively. That means that your healthcare system is still objective
scoring better than Germany, the UK, and the US (the last of which is arguably
a low, low goalpost, I admit).

[1]:
[http://www.who.int/healthinfo/paper30.pdf](http://www.who.int/healthinfo/paper30.pdf)
[2]: [http://thepatientfactor.com/canadian-health-care-
information...](http://thepatientfactor.com/canadian-health-care-
information/world-health-organizations-ranking-of-the-worlds-health-systems/)
[3]:
[https://www.thelancet.com/journals/lancet/article/PIIS0140-6...](https://www.thelancet.com/journals/lancet/article/PIIS0140-6736\(17\)30818-8/fulltext)

~~~
coldtea
> _I 'm sorry, what? The WHO puts the Greek healthcare system at #14._

Statistics are not necessarily the same as "ground truth".

\- Hospitals are under-stuffed,

\- doctors make a pittance and ask for side-money to take care of patients
(what is known as the "envelope" system, from small mail envelopes where such
money are customarily handed over in),

\- rooms are full and patients are stuffed in beds in the hospital corridors
(called "camp beds")

\- waiting times are horrid

\- lack of modern clinical equipment

\- hospital workers are overworked

\- drugs are often lacking or late

\- doctors and nurses are underpaid horribly (think McDonalds level money at
public hospitals)

\- lack of ambulances and people dying after waiting for 2-3 hours to be taken
to a hospital and so on.

Now, despite that, there are a few things that make the Greek healthcare
system still rank high: good doctors (some of the best in Europe), and a
legacy of free access to healthcare for working people (who are mandatory
insured) -- that is increasingly corroded and people are asked to pay ever
more of medical expenses, drugs, etc.

Still better than the US, of course, but that, as you said is a pretty low
bar.

Here are some more modern sources for the current (last 5-10 years situation,
although some of the above issues are much older):

[https://www.theguardian.com/world/2017/jan/01/patients-
dying...](https://www.theguardian.com/world/2017/jan/01/patients-dying-greece-
public-health-meltdown)

[https://www.vice.com/en_uk/article/bjyyp8/the-corruption-
i-s...](https://www.vice.com/en_uk/article/bjyyp8/the-corruption-i-saw-
working-for-a-greek-public-hospital)

[http://www.ekathimerini.com/225105/article/ekathimerini/news...](http://www.ekathimerini.com/225105/article/ekathimerini/news/greek-
hospitals-struggling-over-equipment-shortages)

[https://www.zerohedge.com/news/2017-01-02/7th-year-
austerity...](https://www.zerohedge.com/news/2017-01-02/7th-year-austerity-
greek-hospitals-have-become-danger-zones)

~~~
matchbok
Uh, so like America? I have experiences most of these things.

~~~
coldtea
Yes, but for mostly free.

------
127
I wonder how much Germany using the Southern Europe to suppress Euro to drive
their own economy, is affecting the economies of Southern Europe.

------
vivafrance
The ECB should just do more QE. Monetary policy solved all the US’s problems
following 2008 - should work for Europe too. Printing money to buy bonds
definitey doesn’t cause inflation in asset prices or real estate. Furthermore,
buying bonds is totally different than simply buying stocks. Additionally, I
think people really like when the interest they’re paid on their savings is
below the rate of inflation. In fact, they should follow Japan’s lead and
start printing money to buy ETFs! This will definitely incentivize the
creation of high quality jobs.

~~~
JumpCrisscross
> _The ECB should just do more QE_

To be fair, the ECB has been saying as much. Portugal, Spain, Italy and Greece
have needed to make structural changes to their labor markets, pension
benefits, and tax and regulatory systems for years. Unfortunately, their
voters prefer things like screaming at Macedonia about what it calls itself
[1].

[1] [https://www.theguardian.com/world/2018/jun/17/macedonia-
gree...](https://www.theguardian.com/world/2018/jun/17/macedonia-greece-
dispute-name-accord-prespa)

~~~
hidenotslide
Those "structural changes" are called austerity and they have not worked well
where they have been tried. There is a very strong argument that the Euro
currency is deflationary and is causing many of the various issues like
unemployment, government debt crises, etc. See Stiglitz's book The Euro for an
in depth argument.

Or just look at the unemployment statistics.
[https://www.statista.com/statistics/268830/unemployment-
rate...](https://www.statista.com/statistics/268830/unemployment-rate-in-eu-
countries/) The countries outside of northern Europe that are on the Euro or
pegged to it have much higher jobless rates than those with their own
currency. Czechia, Romania, Poland, Hungary are not pegged while Bulgaria,
Lithuania, Estonia are. Similarly outside the EU, Bosnia is pegged and doing
poorly, Iceland is not and doing fine even though they were very hard hit by
financial crisis.

It's exactly analogous to the way the fixed gold exchange rate was
deflationary during the Great Depression and as soon as countries dropped the
gold standard they started recovering.

~~~
JumpCrisscross
> _Those "structural changes" are called austerity_

These terms have wildly different meanings depending on the context. In my
use, structural change refers to revenue-neutral economic rule making.
Austerity means deficit reduction.

Making it easier to hire and fire employees is a structural change. Making it
cheaper to form a new business, or increasing funding to courts, is also
structural change. Removing requirements that _e.g._ hairdressers be licensed
[1] is another. Some of these measures may actually _increase_ deficits, at
least in the short term.

[1] [http://thefederalist.com/2015/07/15/texas-supreme-court-
stri...](http://thefederalist.com/2015/07/15/texas-supreme-court-strikes-
stupid-licensing-law/)

