{"id":29928,"date":"2015-01-12T17:29:05","date_gmt":"2015-01-12T07:29:05","guid":{"rendered":"https:\/\/billmitchell.org\/blog\/?p=29928"},"modified":"2015-01-12T17:29:05","modified_gmt":"2015-01-12T07:29:05","slug":"while-europe-debates-a-placebo-the-disaster-deepens","status":"publish","type":"post","link":"https:\/\/billmitchell.org\/blog\/?p=29928","title":{"rendered":"While Europe debates a placebo the disaster deepens"},"content":{"rendered":"

\t\t\t\tThe youth are our future. The future is for our youth. Poverty used to be a problem of the aged as they left employment and entered retirement. Shorter life spans than now meant it was a relatively short-lived but deplorable state for people to end in. All that has changed. The youth are still our future but there is a much diminished future for them. Poverty risks and burdens have also shifted from the older members of the population to the younger members. From the retired to the jobless and casualised worker. And we get angry when young people get lured away by what they see as attractive, hope-filled futures, that may or may involve remaining alive in the here and now, and wield guns and bombs. Yet the policies we support close the door on any future that might be more acceptable to the rest of us. Neo-liberalism is creating a ticking bomb. The GFC was just the first act. Societies around the advanced world are undermining their own longevity as they accept that fiscal austerity is the only alternative. To what?
\n
\nLast June, the OECD released a report – Income Inequality Update<\/a> – which provided recent data on trends in income distributions and the demographic impacts of rising inequality.<\/p>\n

The results are well known now although the implications of the trends exposed are less appreciated.<\/p>\n

The OECD found that:<\/p>\n

1. “The distribution of ‘market income’ (gross earnings and capital income) kept widening even as many countries recovered from the crisis.”<\/p>\n

2. The largest rises in inequality “occurred in those countries hit hardest by the crisis: Spain, Ireland, Greece, Estonia and Iceland but also in France and Slovenia. In Spain and Greece, inequality of market income widened considerably in the aftermath of the crisis, and kept increasing more recently as the crisis persisted”.<\/p>\n

3. “Lower income households either lost more during the crisis or benefited less from the recovery.”<\/p>\n

4. “In Greece … poverty increased by almost 15 percentage points over the four years to 2011, with large increases (between 9 and 3 points) also experienced in Ireland, Spain, Iceland, Hungary and Mexico.”<\/p>\n

5. “Over the four years since the onset of the crisis, young people (aged 18 to 25) suffered the most severe income losses, while elderly people (over 65) were largely shielded from the worse effects of the crisis.”<\/p>\n

The OECD use the so-called relative income poverty<\/em> measure, which is “the share of individuals with an equivalised disposable income below 50% of the national median”.<\/p>\n

They also compute “income-poverty risk” for different groups, which is measured relative to the total population.<\/p>\n

As the neo-liberal policy dominance emerged over the last 3 decades or so, the OECD has consistently found that “youth replaced the elderly as the group experiencing the greater risk of income poverty”.<\/p>\n

The latest data shows that:<\/p>\n

\nThe recent crisis has accentuated this trend.\n<\/p><\/blockquote>\n

The trends since the mid-1980s are shown in the following graph (Figure 8 The risk of poverty has shifted from the elderly to the young – in the Report).<\/p>\n

It shows different age cohorts on the horizontal axis against the poverty rate on the vertical axis. The OECD average is scaled in each year to 100 (grey horizontal line) and then relative poverty rate of the different cohorts are expressed for different years (differentiated by colours).<\/p>\n

The clear point is that youth have experienced increased relative poverty rates as a result of the crisis and the subsequent policy response while the older workers have improved their relative position during the crisis.<\/p>\n

\"OECD_relative_poverty_rates_by_age\"<\/a><\/p>\n

<\/div>\n

The OECD Report decomposed the poverty rates into household types. It will be no surprise that in this neo-liberal era it is not retirement that is a dominant factor in generating poverty.<\/p>\n

The OECD notes that:<\/p>\n

\n… the risk of income-poverty was four times higher among jobless households than for the reference population (all individuals living in a household with a working age head … [and in the face of increasing job insecurity and casualisation] … One-worker households also experienced a risk of poverty around 50% higher than for the reference population .. [and] … the risk of poverty among singles and single parents remains disproportionally high.\n<\/p><\/blockquote>\n

Data from the latest – EU Employment and Social Situation – Quarterly Review<\/a> – published for December 2014 on January 8, 2015, shows that the so-called NEET (Not in Education, Employment or Training) rate has been rising in most EU nations since 2008.<\/p>\n

The following graph is drawn from the Report’s database and shows the – NEET Rate in EU Member States for 2008, 2012, 2013 – in terms of the 15-24 years cohort.<\/p>\n

\"EU_NEET_2013\"<\/a><\/p>\n

<\/div>\n

So there is a rising proportion of young people who are now totally alienated from the education and training process and are not working.<\/p>\n

Where are they? Filtering around the blackmarket, selling themselves for sex, selling drugs, living of their parents, stealing, and engaging in other pathological uses of their time.<\/p>\n

What they are not doing is gaining skills that will enable prosperous participation or incomes to manage their own risk.<\/p>\n

As part of the – Europe 2020<\/a> – which was the “EU’s growth strategy for the coming decade”, set in place on March 3, 2010. It replaced the largely failed Lisbon Strategy, that ruled policy making between 2000-2010.<\/p>\n

Europe 2020 had five main targets:<\/p>\n