This is a preview. View original post on this site
My last piece discussed the various structural problems that caused “Eurosclerosis” — the persistent stagnation of European labor markets.
Powerful unions and collective bargaining; strict employment protection laws that raise firing costs and discourage hiring; poorly designed welfare systems and high marginal tax rates that reduce the incentive to work. These are just some of the factors that create rigid labor markets, favoring insiders over outsiders.
While high unemployment has mostly disappeared thanks to an aging workforce, European labor markets continue to be extremely sclerotic. Today, it is not so much economic inactivity but rather a lack of worker mobility that is plaguing Europe’s economies. A stagnant job ladder weakens the economy, stifles career progression, and limits workers’ lifetime earnings.
Europe’s main problem today is the lack of job switching
While the Eurozone unemployment rate continues to be at historic lows, worker churn