It was the unemployment that was the hardest to bear. The jobless millions were like an embolism in the nation's vital circulation; and while their indisputable existence argued more forcibly than any text that something was wrong with the system, the economists wrung their hands and racked their brains and called upon the spirit of Adam Smith, but could offer neither diagnosis or remedy.
The main cause of Europe's deep fall - the losses of inclusion, job satisfaction and wage growth - is the devastating slowdown of productivity that began in the late 1990s and struck large swaths of the continent. It holds down the growth of wages rates, and it depresses employment.
The problem of Italy is not really a question of age. Japan has an older population, and it is now in full economic recovery. The problem is that Italy is old in the structure of the society.
If you are trying to favor the unions by having more rigid labor market and keeping wages very high, you could be blocking people from getting new jobs.
If you think the dominant orthodoxy - shrink your economy, render workers jobless, impoverish families, and still grow - is an oxymoron... then you would be right.
Unemployment undoubtedly is and always has been a scourge….The real tragedy is not unemployment per se, but unemployment plus the impossibility of providing adequately for the unemployed without impairing the conditions of further economic development.
The cycle of jobless youth, uncertainty about the future, depressing consumption, and weak investment and stresses on both the supply and demand side of economies are all thorns in the wheel of capitalism.
Firms are not always willing to cut wages, even if there are people lined up outside the gates to work. So why don't they?
