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(Essay 4) Discuss how Europe’s unemployment can be explained in terms of job creation problems
- Employers believe wages are too high:
- § Companies do not wish to create jobs if a worker’s ware is higher thanthe revenue he or she would generate
- § Wages are high because of unions
- § Businesses also have to pay high employer taxes per employee to fund social welfare plans
- Firing restrictions:
- § Reluctant to hire if they can’t fire
- More difficult to create service sector jobs:
- § Restrictions on store hours
- § Restrictions on self employment
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(Essay 4) Attitude problems
- Geographic immobility- European workers are less likely to move for a new job than US workers
- § Language barriers
- § Hard to become socially accepted
- § Expensive housing
- § Lack international connections
- Anti-Work-Ethic Attitudes§ Refused to take low paying jobs because it would hurt their status
- § Preference for leisure
- § High unemployment compensation- lowered incentive to find new job
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(Essay 4) World Changes
- Technology change- computerization and automation destroyed low skilled jobs
- Globalization- companies spread to knew markets for more profit
- Aging populations- worry about pension crisis
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(Essay 4) Europe’s Policy Options
- Keep the same system but create more jobs through gov action
- Coverage to the US model, create jobs the way the US does
- Accelerate unification of Europe
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