Europe’s Hidden Jobless More than 11 million Europeans are without jobs and have given up trying to find any. It’s worst in Italy, where 4.5 million have left the workforce. Euro area Italy
come up with his trademark to show he belongs at the top.” As Sun Yinhuan, vice chairman of the All-china Federation of Industry and Commerce, said in a news conference in Beijing on March 11, “It clearly points the way for the future direction we should take.”
The Four Comprehensives take on China’s biggest economic and political questions. At the same time, they reflect tensions in the party and society. Achieving moderate prosperity is a sensible goal. But in China that means a continued fixation on excessively rapid growth, with ever higher debt and zombie companies the cost. Reforms, as Xi sees them, mean more support for state-owned companies, not less, says Willy Lam, a professor at the Chinese University of Hong Kong and author of Chinese Politics in the Era of Xi Jinping.
There are legitimate efforts to improve the legal system. But with Xi fixated on ideological control, deepening the rule of law also means smothering dissent, says Kristin Shi-kupfer, head of research for politics, society, and media at the Berlin-based Mercator Institute for China Studies. Promoting party discipline, she says, includes both the crackdown on corruption and the silencing of members who think Xi has gone too far in censoring opposing views.
Shortly after taking power in 2012, Xi introduced the “Chinese Dream” of national rejuvenation and a better life for all. Lately he seems to have favored the Four Comprehensives instead. Another slogan, “Xi political economics,” is being promoted: It’s a grab bag of all of his theories on the economy and politics.
Xi needs to cement his authority before next year’s National Congress of the Communist Party of China, a twice-a-decade assembly where top party members are replaced. “Xi’s PR people are building up his personality cult in preparation for the 19th Party Congress, where presumably he will appoint more of his people into the central committee and politburo,” says Lam. The true meaning is that all policies must “reflect the leadership of the party and the top position of Xi Jinping,” he adds. “That is [the slogan’s true] meaning.” If Xi is successful, the Four Comprehensives could be enshrined in the party constitution when he most likely steps aside as party leader in 2022. �Dexter Roberts
The bottom line The Four Comprehensives could help the Chinese president consolidate power before the Party Congress.
of sluggish growth and high unemployment have created a pool of adults who’ve rarely if ever held jobs or have been out of work so long that their skills aren’t marketable. “After so many years, I cannot sell myself in any way,” says Maria Luisa Tegon, 52, who last worked in 2007 as a computer programmer specializing in an IBM operating system that later was discontinued. Tegon, who says she stopped looking for work two or three years ago, lives on her husband’s income and occasionally works as a ticket seller at a municipal parking lot near her home in Venice. “I definitely don’t need my IT knowledge and experience to do that,” she says.
Some discouraged workers, like Tegon, get financial support from family members, while others scrape together a living from off-the-books jobs. Those solutions create other problems, says Giuseppe Ragusa, an economist at LUISS Guido Carli University in Rome. People who don’t have legitimate jobs don’t pay income taxes, increasing the burden on their taxpaying countrymen. Nor do they pay into public pension systems, which in Europe are already struggling to keep up with a rapidly aging population. What’s more, many retirees now use their pension income “as a stipend for their sons and daughters who don’t work,” Ragusa says. Having two generations dependent on pension income makes it harder to build political support for badly needed pension reforms.
Not all European
countries are afflicted equally by the discouraged-worker syndrome. In Spain the percentage of people who quit looking for work never exceeded 5.1 percent, even in the depths of the European debt crisis in 2013, when Spanish unemployment climbed to almost 27 percent. Since then, unemployment has fallen to 20.9 percent and the rate of discouraged workers is down to 4.4 percent.
A key factor in keeping Spain’s discouraged-worker count low was its unemployment-insurance system, says Stefano Scarpetta, the director of employment, labor, and social affairs at the Organisation for Economic Co-operation and Development in Paris. Spain offers relatively generous unemployment benefits, covering more than 60 percent of a worker’s previous income for as long as two years—but in exchange, recipients are required to search actively for work. “One of the things we learned from the crisis was, even countries that have generous benefits, if they are closely tied to job-searching, counselling, and training—these are the countries that performed better,” Scarpetta says.
Italy offers some of Europe’s skimpiest unemployment coverage, with benefits lasting no more than 10 months and more than 40 percent of workers not covered by unemployment insurance at all. France has generous benefits but is less stringent about requiring people to search for work, so recipients tend to stay on the dole longer, Scarpetta says. Discouraged workers in central and eastern Europe often started their careers under Soviet- era central planning and can’t find suitable jobs now.
One of the biggest worries about discouraged workers is what happens to them in their retirement years. A recent OECD study estimated that someone who goes without a job for five years is likely to have 10 percent lower retirement income than someone who worked continuously. What about those who spend whole decades on the sidelines? Discouraged workers often rely on “the family network and wealth accumulated by past generations,” economist Ragusa says. “When this wealth is eroded, no one knows who will take care of these people.”
Elisabetta Bombacci lost her job as a saleswoman in a Rome dress shop in 2013. Now 52, she lives on her parents’ savings and cares for her 90-yearold widowed mother. “I dream
Unemployment rate Ratio of discouraged workers to labor force