Europe is facing a jobs and unemployment crisis that is unprecedented in recent times
• Since the start of the economic and financial crisis in mid-2008, Europe has lost nearly 6 million jobs.
• Unemployment stands at its highest level since 1998. Since mid-2008, the number of people unemployed for longer than one year in Europe has risen by 61 percent, from 6.1 million to 9.8 million. And in some European countries, such as Spain and Greece, youth unemployment is reaching 50 percent.
• Even if Europe were suddenly to generate growth of 2 percent, it would still not reach pre-crisis levels of employment until 2014. At an annual GDP growth of 0.5 percent, which is above the current rates, it would not happen until 2019.
Within that context, there are two paradoxes that are further complicating an already difficult picture. First, despite record high unemployment, Europe continues to experience significant shortages of workers with key skills. This is particularly true for international business skills such as foreign languages, the ability to manage cross-border teams, and cultural awareness—all crucial for success in the current global job market—along with skills in science, technology, engineering, and math (STEM).
The current combination of high vacancies alongside high unemployment is extremely rare, indicating that the traditional relationship between job openings and unemployment (known as the ‘Beveridge curve’) appears to have broken down recently (see Figure 1). This suggests a mismatch: the location or skills of unemployed workers in Europe simply do not correspond to the location or skills of the positions available..