Wednesday, June 10, 2009
The Italian Economy: Day 8
The natural rate of unemployment here is much higher than in America, sitting at 7%. That's a pretty abysmal number and it reflects the difficulty of getting a first job because of the "easy to hire, difficult to fire" philosophy.
The activity rate in Italy is also among the worst of developed nations, sitting between 50 and 60%. The women and the youth here get very discouraged from working when they see brothers, fathers, husbands, etc. who cannot find jobs, and they pull themselves out of the employment pool. In addition, the Italian labor laws make it very costly to hire part-time workers, so part-time employment is rare in this country.
Basically, Italy is not a good place to be a worker, unless you land the equivalent of the job at GM five years ago with the full health benefits and the lifetime pensions. I guess the Italians better hope their government doesn't need a bailout anytime soon...
Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty