One of the most promising measure normally present in monetary unions is unemployment compensation. This idea is currently being given a push in the EU – including by the Employment Commissioner Laszlo Andor who has talked about it as serving as an automatic stabiliser and argued that “We need and must study the possible set-up of such a European unemployment benefit scheme as we develop the next phase of Economic and Monetary Union”. Such an idea deserves a good look.
The basic concept arises from the observation that if a member state is affected by slower growth for a period then it is likely to have higher unemployment. If the funding of the compensation paid to unemployed workers is EU or Eurozone wide then it is more likely that in effect it comes from the more prosperous areas and better off citizens. It is thus a redistributive tool, even if one slightly hidden (although hardly a ‘stealth’ measure). Surely this is something the left should be pushing for.
Well, like any idea it will have massive political problems in getting those likely to have to be net contributors to agree to it. But we should put that aside for the moment and decide whether it is worth fighting for.
Choosen adapted excerpts by Job Market Monitor from
Losing your job is awful, but it’s less awful in some places than in others. Call it the real estate rule of unemployment — it’s all about location, location, location. But where’s the “best” (or least awful) place to lose your job? Israel. Unemployment is created equal but unemployment benefits are not. The chart below, from … Continue reading »