Unemployment in the European Union hit a record high in May. According to data provided by Eurostat, the unemployment rate in the 17 EU economies hit 11.1%, up from 10% the year before. There are now a quarter of a million more unemployed people in Europe than there were a year ago. During that period, the unemployment rate in those countries for those 25 and younger jumped from 20.5% to an unbelievable 22.6%. Meanwhile, in the United States, the youth unemployment actually fell from 17.2% to 16.1%.
Despite the improvement in the U.S., the worsening trend of unemployed young people highlights the severity of the issues facing many of Europe’s major economies. 24/7 Wall St. reviewed the 29 nations included in the report (most of which are in Europe, but they also include the U.S. and Japan) and identified the 10 nations with the highest unemployment rates among those 16 to 25.
With a few exceptions, most of these countries have been hit hardest by the recession. The so-called PIIGS countries of Portugal, Ireland, Italy, Greece and Spain — infamous for their contribution to the European sovereign debt crisis — are on the list. The remainder are not as infamous but nonetheless have been hit harder than the rest of the developed world.
Some of the countries with the highest youth unemployment rates — which in several cases exceed 50% — also have some of the highest overall unemployment rates as well. Spain, which tied with Greece for the highest youth unemployment rate (52.1%), also had the highest total unemployment rate of the 32 countries examined. All of the other countries on our list for which data is available had among the top 10 overall unemployment rates in May.
As evidence of the level of fiscal difficulty some of these governments are in, their sovereign credit ratings are among the worst in Europe. Nine of the 15 with the worst youth unemployment rates have a Baa3 rating or worse. Ireland and Portugal both have Ba ratings, while Greece is the only country in Europe with a C, or junk, rating. Countries with the lowest youth unemployment rates are almost without exception rated well by Moody’s. Only one of the 15 countries with the lowest rates has a worse rating than A1.
The countries with this severe unemployment also experienced the worst GDP contractions the European Union has seen in its brief history. In 2009, the gross domestic product of nearly every country in Europe (as well as Japan and the U.S.) fell. Latvia and Lithuania, which have two of the highest youth unemployment rates, had the highest single-year contractions in the EU in recent history, at 14.7% and 18%, respectively. In 2010, the most recent for which data are available, most of these economies bounced back, with the exception of five, which continued to contract. These five — Lithuania, Greece, Croatia, Spain and Ireland — are all on this list.
Relying on 2012 unemployment data for the most recent available month published by Eurostat, which records data for sovereign European nations, the U.S. and Japan, 24/7 Wall St. identified 10 countries where young people cannot find a job. Eurostat defines unemployed persons as being aged 16 to 74, without work, able to start within two weeks, and having actively sought work in the past four weeks. Youth unemployment rates specify a narrower age range of 16 to 25. GDP data, including annual growth rates, come from the World Bank, which uses current U.S. dollars. 24/7 Wall St. also consulted Moody’s Investor Service’s sovereign credit ratings as of July 2012.
These are the countries where young people cannot find a job