The global financial crisis that began in 2008 shook the world’s economies, but the long-term impact hit some countries harder than others.
First, though, the good news: the Organization for Economic Cooperation and Development’s (OECD) Employment Outlook 2018 shows an overall improvement in labour conditions across its member states, with equally encouraging growth in the average employment rate to 2% above pre-crisis levels.
But, as the chart below shows, a before-and-after look at the unemployment rates of member states reveals dramatic differences from one economy to the next.
The chart shows the proportion of each labour force that is out of work, and Poland has seen the biggest drop, cutting its 2006 figure by almost two-thirds to 4.9% by 2017.
In Germany, the unemployed made up 3.8% of the workforce in 2017, down from over 10% before the crisis began. Other countries such as Hungary and the Czech Republic have also experienced sizeable reductions over the same period.
Against this encouraging trend Greece has suffered a dramatic spike in unemployment, with the 2017 total climbing to 21.7% of the working population, more than double the 2006 figure. Large increases in unemployment and an underutilized workforce were accompanied by falling output, very high debt, a serious GDP deficit and deflation (-2.5% by December 2014).
Similarly, Spain has seen a jump in unemployment over the past decade, due partly to structural problems in its labour and education sectors (Spain has the one of the highest dropout rates in Europe at both high school and tertiary level). The country’s jobless total for 2017 reached 17.3% of the labour force, more than double the pre-crisis figure.
Lack of wage growth
Along with its impact on employment levels, the financial crisis caused a reduction in wage growth in a lot of countries, leading to a drop in living standards for many. The proportion of working-age people earning the “low-income” rate jumped to 10.6%, up from 9.56% a decade earlier.
Although Korea, Mexico and Chile have seen a decrease in the number of low-income households, most of the countries hit hardest by the euro crisis, such as Greece, Italy, Spain and Slovenia, have suffered a 2% rise.
Source: World Economic Forum