Thursday, August 8, 2013

Greek Unemployment Hits Another Record High

The unemployment rate in Greece was 27.6 percent in May, marking yet another record high for the country. That figure is up from 26.9 percent in April, which was also a record, but even that number has now been revised up to 27 percent. The country’s rate is more than double the average rate across the euro zone.

The news is even worse for the country’s young people. The unemployment rate for those ages 15 to 24 is 64.9 percent. In total, 1.38 million people are jobless.

This is the Greek economy’s sixth straight year of recession. Its economy has been struggling under a heavy burden of austerity imposed by eurozone leaders in exchange for bailout funds. The country recently laid off 25,000 public workers even with so many out of work to meet the terms of the next $9.2 billion in rescue funds. It has been steadily cutting the public workforce, reducing wages, raising taxes, and slashin public services.

But the drive to austerity was oversold to Greek leaders. The International Monetary Fund has acknowledged that its predictions for the economic benefit of all these cuts were far too optimistic. It had predicted an unemployment rate of just 15 percent, nearly half of its current rate. Some European leaders have backed away from the cut-and-grow fervor, but the demands on Greece have yet to be eased.

The impact of austerity isn’t just felt in Greece’s jobless rate. Drastic cuts to public health spending have led to a huge spike in stillbirths. Austerity has been linked with increases in suicide, HIV rates, food-born illness outbreaks, and other preventable health crises.

The U.S. at first avoided adopting austerity with the stimulus, which put it on a stronger economic path. But it has since shifted to its own spending cuts, the most drastic of which has been sequestration. These cuts are keeping unemployment higher and economic growth lower than they otherwise would be.


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