15/08/2005 9:09:01 am
Job Regulation - No Job Creation. The other day, Diana Furchgott-Roth, Senior Fellow at the Hudson Insitute, wrote a piece in the Financial Times about what the less regulated labour market of the US can teach Europe:

"Over the past decade, European employment has grown by less than 10 per cent, while US employment has grown by 17 per cent, creating more than 2.2m jobs last year alone. US figures last Friday showed continued growth in employment, with 207,000 payroll jobs created in July. ... The unemployment rate remained at a low 5 per cent, and an additional 450,000 people moved into the workforce. ...

The unsung story behind US job creation is the flexibility and turnover in American labour markets, which boost employment. Frequent job changes lead to better job matches and higher productivity. In 2004 there were 54m new hires and 51m job separations in a labour force of 147m. Over half these separations were voluntary - people who left jobs because of better opportunities. Younger baby boomers, born in 1957-1964, held an average of 9.6 jobs from age 18 to 36. ...

Countries with high employment-protection legislation and less turnover have more long-term unemployment. Last year in the US only 13 per cent of unemployed workers could not find work within 12 months, compared with 21 per cent for the UK, 42 per cent in France, 52 per cent in Germany and 50 per cent in Italy. In the EU as a whole, the percentage of unemployed out of work for longer than a year was 44 per cent."

Read the entire article - >