There will not be any sustainable solution to the global economic crisis unless the level of unemployment is radically reduced in both developed and emerging countries.
This is why the latest employment figures from Europe and the United States are a setback to efforts to boost the global economy. Unemployment in the Eurozone was 11 percent in April, unchanged from March, but still the highest since records began. Spain, the Eurozone economy on the edge of bankruptcy, had the highest unemployment rate at 24.3 percent.
In the US, the jobless rate rose to 8.2 percent from 8.1 percent in April, the Labour Department said. Stock markets across the world fell on the news. High unemployment means little demand for goods and services and even more fragile consumer and investor confidence. But, it is only economic expansion that will allow Europe and US to generate the revenue they need to effectively tackle their financial problems.
The unemployment figures have boosted calls for a further round of stimulus in the US and Europe. This stimulus needs to be focused on the development of sustainable employment creation programmes, rather than increasingly opaque, expensive — and ultimately ineffective — policies designed to stabilise the financial markets. Secure employment is also a much better safety net than politically opportune but unsustainable spending on social security grants.
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