Today
if you are following what is `happening' across the
countries in Europe, you would not miss the massive
strikes that are bringing nations to grinding halt.
Workers in most European countries seem to be in a mood
of discontentment. In June, France witnessed massive
strikes against pension reforms; hundreds of thousands
of workers are still taking to streets to protest the
stubborn stand of the government. In Britain, firemen
are demanding a pay rise and resisting proposed changes
to their working conditions; they are on a partial strike
for months. Even Austria that is relatively calm, has
witnessed huge protests that the country has not witnessed
since World War II. All this is causing further dents
to the already fragile economic situation in Europe.
Unemployment across Europe is still around 8.3%, considered
to be quite high and twice that is prevailing in America.
Businessmen across Europe, in just about every sector
of the economy, are complaining about the falling demand,
political uncertainty, and falling profits. While recovery
seems to be far away, things seem to be going from bad
to worse.
Countries
like Germany, France, Spain and Italy are already grappling
with low growth levels (in the case of Germany the projected
growth level for 2003 is 0%). The welfare state model
that served Europe for quite some time now appears to
have become unsustainable. The combination of generous
unemployment benefits and strict employment protection
laws is proving to be a heavy burden on the government
finances. This is not to say that the labor market reforms
are panacea for all economic woes. Though labor markets
do not seem to be very important for the growth of nations,
their significance becomes apparent when economic progress
is seen in a broader sense. Justin Wolfers, Assistant
Professor of Economics, Stanford Business School says,
"Cross-country studies of happiness and well-being
consistently show that income just isn't that important
for individual or societal well-being. But feeling included
and useful, are important, and work is a key part of
this. So, if we measure `economic progress' in this
more holistic way, then unemployment, and hence labor
market institutions, are crucial." |
